Gold Markets

Gold is trading in Four World Major Markets 24 hours round the clock. Hong Kong Gold Market (Local Time) 9:00 am - 12:30 pm (Mon - Fri) 2:30 pm - 5:00 pm (Mon - Fri) Sydney Gold Market (Local Time) 9:30 am -3:00 pm Zurich Gold Market (Local Time) 8:00 am - 5:00 pm London Gold Market (Local Time) 8:30am - 4:00 pm Fixing : 10:30 am & 3:00 pm New York Gold Market (Local Time) 8:20 am - 1:30 pm New York Access Market (Local Time) 3:15 pm - 8:00 am (Mon - Thu) 7:00 pm - 8:00 am (Sunday)

The Loco-London Precious Metals Market

The most important OTC markets for gold and silver are the "Loco London" markets in which the two metals are traded for delivery in London. These markets operate under the auspices of the London Bullion Market Association (LBMA), but are not exchanges. Full membership of the LBMA is restricted to bullion dealers with offices in London. Loco London trading was originally the preserve of London bullion houses alone, but today Loco London gold and silver are freely traded by dealers in many other centres. In Asia, the main centres from which professional dealers quote Loco-London gold and silver prices are Hong Kong, Tokyo, Sydney and Singapore; in Europe, apart from London, dealers trade principally from Zurich and Frankfurt, while in the United States, New York predominates. In all centres, prices are mainly quoted and traded against the U.S. dollar. Settlement of the U.S. dollar countervalue of deals done is generally made in New York, separately from the delivery of the gold and silver in London. Notwithstanding that the loco London gold market is a spot market, settlement can be deferred by making special credit facilities available to clients. These facilities normally involve the lending of gold and dollars, initial margins and variation margins, similar to the practice for gold futures trading. The development of this mechanism led to the formation of a secondary deferred settlement market, as distinct from an inter-bank spot market, in which traders, manufacturers and producers in the world take part. The Loco London Market can serve various purposes including hedging, investment and speculation. As is typical with OTC markets there is no physical trading floor. Deals are transacted on a principal-to-principal basis between dealers who have established bilateral credit limits for trading with each other. Unlike organised exchanges there are no specified contract sizes nor formal rule books but trading and settlement are completed in accordance with well-established usage. Business is mainly conducted by telephone or through electronic dealing systems established to serve professional dealers. In either case, direct contact must be made on a bilateral basis. This means that it is difficult for investors to have real time access to the most favorable prices. In fact, starting from the early of 2002, spot gold price has surged by more than 19% to $331.00 a troy ounce! The bullion metal broke $300 resistance level on 28 March with the support of producers'' reduction in gold hedging, weaker dollar and equities markets and geographical political tension. To seize on the opportunity of taking profit from gold''s rally, investors can participate in the precious metal market through its precious metal online trading system. mibd-gold.com provides the most efficient and convenient way for taking this opportunistic market.

Hong Kong Gold Market

Hong Kong Gold Market has already developed into one of the Big Four in the world, with its daily quotations keenly watched in other trading centers because of the main reasons below: • Freedom from foreign exchange • Excellent financial and communications services • Chinese people''s regard for gold Hong Kong neatly fits into the time zone between the largest two Gold Markets in the world, New York and London. It is eight hours "faster" than the London time and thirteen hours "faster" than New York. New York 10 p.m. | Hong Kong 11 a.m. | London 3 a.m. All of the major Gold Markets are closed between 2:30 a.m. and 3 p.m. Hong Kong time. Should any significant newsbreak occur during this period, international investors may take the advantage of the news by trading through Hong Kong Gold Market.

The Trading Market

The Chinese Gold & Silver Exchange Society (CGSES) was established in 1918 as an open outcry system to regulate and standardize the transaction. CGSES mainly deals with Spot Gold trading with payment in terms of Hong Kong Dollar. The Loco London Gold Trading System is another Spot Gold Market in Hong Kong with payment in terms of US Dollar. The Fixings take place twice daily at 10:30 and 15:00 hours in the City of London with the participation of the following five Fixing Members: • Bank of Nova Scotia－Scotia Mocatta • Barclays Bank • Deutsche Bank • HSBC USA • Societe Generale As sufficient credit facilities are available to defer the settlement, its operation is similar to the practice of gold future trading. A secondary deferred settlement market is firmed. The Comex Trading System in Hong Kong with the nature that is very similar to Loco-London except it is dealing in Future Gold in New York Gold Market. Gold Investment can be divided into several types: A. Ornamental Gold Especially for Chinese people, Gold represents prosperity and fortune. Gold Coins, Gold Bars, Gold Figures, and any other Ornamental Gold are collected as a symbol of wealth and kept as stored value. B. Investing in Gold Using the saving banks or financial institutes to speculate in Loco-London System for Spot Trading or Comex for Future Trading. CGSES (Spot Trading) Loco-London (Spot Trading) Comex (Future Trading) Trading Unit 100 taels 5000 kilograms 100 ounces 100 ounces Purity of Gold >99 % >999.9 % >99.5 % >99.5 % Type of Trading Spot Trading Spot Trading 2, 4, 6, 8, 10 & 12 Payments HK $ US $ US $ Trading Days Mon. - Fri. Mon. - Fri. Mon. - Fri. Minimum Price Fluctuation HK$0.5 per tael HK$0.01 per gram US$0.10 US$0.10 Maximum Daily Price Fluctuation NIL NIL US$ 75 per ounce

Details of Trading Months in Comex

Futures:

Trading is conducted for delivery during the current calendar month, the next two calendar months, any February, April, August, and October thereafter falling within a 23-month period, and any June and December falling within a 60-month period beginning with the current month.

Options:

The nearest six of the following contract months: February, April, June, August, October, and December. Additional contract months - January, March, May, July, September, and November - will be listed for trading for a period of two months. A 24-month option is added on a June/December cycle. The options are American-style and can be exercised at any time up to expiration. On the first day of trading for any options contract month, there will be 13 strikes prices each for puts and calls.

Last Trading Day

Futures:

Trading terminates at the close of business on the third to last business day of the maturity delivery month.

Options:

Expiration occurs on the second Friday of the month prior to the delivery month of the underlying futures contract.

Key Asian Gold Market

Country Market Status Acceptable Melters & Assayers (Good Delivery Bars) Loco-London Gold Trading Import of Gold Bars China Restricted Restricted Refinery of China Hong Kong Free Free NIL India Restricted Restricted NIL Indonesia Free Free NIL Japan Free Free Ishifuku Metal Industry Co. Ltd Mitsubishi Materials Corporation Mitsui Mining & Smelting Co. Ltd. Nippon Mining Co. Ltd. Sumitomo Metal Mining Co. Ltd. Tanaka Kikinzoku Kogyo K.K Tokuriki Honten & Co. Ltd. Central Bank, Democratic People''s Korea, North Restricted Restricted Republic of Korea Korea, South Restricted Free NIL Malaysia Free Free NIL Myanmar Restricted Free NIL Philippines Restricted Restricted Central Bank of the Philippines Singapore Free Free Degussa (Private) Limited Taiwan Restricted Free NIL Thailand Restricted Free NIL Vietnam Restricted Free NIL

Sources: London Bullion Market Association, London

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