The World's New Gold Hub

“The Dubai Multi Commodities Centre (DMCC),” reports Byron King, “has finished building a state-of-the-art precious metals vault, with world-class tracking and security systems. Think Fort Knox, but in the desert and without the trees and pretty landscaping we see in the hills of Kentucky.

The new DMCC… as understated as you’d expect

“The new vault will become the home for the exchange-traded fund (ETF) of Dubai Gold Securities. Also, ‘It’s a natural home for the central banks in the region to store their gold in Dubai, rather than in London, where they have typically held their gold,’ said a Dubai-based gold dealer INTL Commodities DMCC’s CEO Jeffrey Rhodes. Yep. ‘Natural home.’ (Margaret Mead, call your office!)

“A DMCC official stated that the new vault will be used to store precious metals associated with precious metal-based ETFs that are on the drawing boards and scheduled for launch later in 2009. This can only add to worldwide demand for gold and silver, especially from the traditionally gold-friendly Middle East.

“The bottom line: When the American people realize that the dollar is in for another round of inflation, they’re going to look for a way out. When people envision the future decline in their purchasing power, we’ll see a rush for the monetary exits. It’ll be the ‘Gold Panic’ of 2009, or 2010 or 2011… whichever year gets the naming rights.”

The Daily Reckoning