The trend in 2017 is pointing toward a head on collision between the synthetic market and the physical market in the precious metals. The hard launch of the Allocated Bullion Exchange in 2017 which is a modern electronic exchange will modernize the 100 year old fractional reserve gold market. This exchange will require physical metal to be deposited before you can transact as opposed to the current synthetic market where synthetic derivatives are all that are required. This will be the first time that a completely fluid gold market will be available to the institutional investor as well as the ordinary retail investor 23 hours a day. “The exchange introduces a new centrally cleared, transparent and cost-effective allocated exchange system and standard for the industry by offering precious metal market participants an exchange where they are able to trade, deliver or store physical precious metal in 7 global locations.”(ABX website)
Andrew Maguire an ABX board member and gold expert recently described this exchange as the first big step in breaking up the monopoly. For the first time a producer can bypass the unallocated bullion exchange and receive financing without directly transacting with the banking cartel. The ABX will allow producers not only the ability to avoid the ancient cartel but it will allow them to add themselves to the many lawsuits that have been filled throughout much of the last decade. For the first time a gigantic step toward true price discovery may be on the horizon.