Jun 29

Gold and Silver Ownership and Prices Not be Affected by Dodd-Frank Legislation on July 15 (ZeroHedge, May 29, 2011):

The 2010 Dodd-Frank Act, and the regulatory legislation associated with it, is due to come into law in just over two weeks on July 15.

A number of clients, particularly U.S. clients, have contacted us regarding the possibility that the new legislation could lead to price falls in the gold and silver markets. Some were even concerned that it had implications for their ownership of physical coins and bars and for bullion stored in Western Australia, Switzerland and vaults internationally.

Concerns arose due to reports that retail foreign exchange, spread betting and CFD providers are set to discontinue offering their gold and silver over the counter products. These allow speculators to take leveraged positions, short and long, in over the counter derivative products.

After July 15, U.S. residents are prohibited from trading these OTC gold and silver derivative products. All precious metal transactions that are leveraged and not delivered in 28 days, must be conducted in a “designated contract market,” a board of trade or exchange designated by the CFTC.

Those who own bullion should be reassured that their bullion ownership will not be affected as the legislation does not apply to the physical coin and bar market.

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