Posted on 01/03/2010 1:39:30 AM PST by TigerLikesRooster
Vietnam orders gold-trading floors shut by end-March
HANOI: Vietnam, where many people see gold as a safe haven against economic uncertainty, has ordered public gold-trading floors shut by March 31 because they rest on a “fragile foundation”.
The order affects about 20 gold-trading houses operated by banks and other firms, which have been running for more than two years, the state-run Vietnam News reported. Retailing of gold jewellery will still be allowed, it said.
The gold-trading floors have offered heavily-leveraged trading in which investors pay a security deposit of only seven percent of the net asset value of their trades while banks back the rest, the report said.
“It’s very risky for traders involved in such highly leveraged operations,” a Hanoi-based investment analyst, Bui Kien Thanh, told Dow Jones Newswires.
The government will need to reorganise the gold-trading floors as part of efforts to stabilise domestic financial and money markets, Thanh said.
(Excerpt) Read more at dailytimes.com.pk ...
Ping!
The Chinese went nuts a few years ago on oil. Some traders think there is no “top” in sight.
Good. Leverage is usually the biggest cause of bubbles and busted bubbles and general market instability.
Which is of course why the U.S. banking/government complex encourages ETFs, double-percentage ETFs, and even triple-percentage ETFs, and all available to be bought on margin.
*SIGH* I miss ‘the good old days’ of $1,200.00/oz. ;)
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