All-night Chinese take out

10:28 am (Hawaii) It has been nearly 48 hours since the Hong Kong Mercantile Exchange opened gold futures trading, a 15-hour-per-day drive-through window that could be an open challenge to the puppet show at CME. I don't think the powers that be in Hong Kong give a ship rat's ass about CME requests or demands. There are 18 entities backing the gold futures in HK, including a Russian billionaire. I think their primary reason for opening this is to make money. And they will. Anything else is extra fun.

It's hard to say for certain whether the opening nearly 48 hours ago is what triggered the rally in Spot Silver and Gold. They were due for a bounce. But there hasn't been a sustained takedown since. In fact, there has been one margin decrease*. Maybe there's really nothing to the HKMEx product and I'm excited over something that has no impact. That would explain the dearth of media attention. But if Spot Gold runs to 1600 from here, if Spot Silver returns to 40 in a few sessions, I have to conclude that HKMEx was a factor.

I suppose unconsciously I believe both Spot prices will rise more. Slowly, but higher. But I need more reason, not a "feel", before I hold any paper overnight or buy more physical.

Update, 3:43 pm (Hawaii) No surprise, China buying gold in a big way.

Financial Times: Chinese set new standard in buying gold (May 19 2011)