New York Gold Futures Market!
As the closing bell rang, Reggie Green and his entire team breathed a sigh of relief.
Just moments ago, they had successfully sold off all 11,000 futures contracts in their portfolio; now, all that remained was to see how low the market price had dropped.
Soon, George, who had been overseeing operations, strode in and reported to Reggie Green: “Boss, the price of futures contracts on the market has dropped to $44,860 per contract.”
Upon hearing George’s words, the VIP lounge—which had been filled with a somewhat tense atmosphere—instantly erupted in thunderous cheers.
After all, the futures contracts they had just dumped onto the market had all been purchased at $46,000 per contract, yet the average selling price was less than $45,000.
If today’s gold futures contract price hadn’t dropped below $45,000, they would have made a loss just for the sake of making a splash.
Although the price of $44,860 per contract was barely enough to break even, at least they hadn’t lost money, which finally put everyone’s minds at ease.
More importantly, the goal of today’s test run has been achieved, and the results were quite positive.
From the 11,000 futures contracts sold off, it was clear that current investors have limited confidence in gold futures contracts—which is good news for those looking to short gold.
Amid the cheers of his staff, Reggie Green took a deep breath and said to Li Yi, “Li, your judgment was correct. The market really isn’t very bullish on gold futures after all!”
Li Yi smiled and said, “I have confidence in my judgment. Besides, Mr. Green, you’ve staked your entire fortune and the company’s future on this—how could I possibly let you down?”
“Li, you’re an excellent investor and a truly trustworthy partner!” Reggie Green said happily.
“Thank you for your praise, Mr. Green!”
“Li, to welcome you as an official member of Green Brothers, I’ve arranged a reception at the Hilton Hotel. You must attend!” Reggie Green said.
“Alright, I’ll be there on time!”
Although Li Yi didn’t particularly enjoy attending such receptions, he knew he couldn’t decline this one.
After all, Reggie Green had organized this reception specifically for him; failing to attend would be a major snub.
Seeing that Li Yi had agreed, Reggie Green immediately gave him the detailed time and location of the reception, and then the group left the VIP lounge at the futures exchange.
Although Li Yi and his group had left, the impact of the Green Brothers entering the market to short gold was slowly taking hold.
A move of this magnitude by the Green Brothers’ firm naturally could not be hidden from the well-connected institutions and investment firms.
Compounded by the fact that the firm’s key personnel had spent the entire afternoon signing contracts with brokers, it was virtually impossible to keep the news under wraps.
Soon, the news of the Green Brothers’ short position in gold spread like wildfire, quickly sweeping through the entire New York investment community.
Upon hearing the news, Wall Street investors were stunned by Reggie Green’s move.
After all, just that morning, Green Brothers had completed a share transfer and welcomed a new major shareholder.
Logically, the arrival of a new shareholder would inevitably trigger a series of chain reactions, and Green Brothers should have been busy dealing with internal issues in the days that followed.
But no one could have imagined that they would make such a big splash that very afternoon—it was simply baffling.
Overnight, Wall Street investors were abuzz with speculation about Green Brothers’ investment. Most were not optimistic, believing the company was highly likely to suffer losses this time.
The reason was simple: in their view, Green Brothers had entered the market far too late.
If they had entered the market when gold was at $600 per ounce, they would have made a killing.
But now that the international gold price had fallen below $500, entering the market at this point was not only risky, but even if the price were to continue falling, how much lower could it possibly go at this level?
In the eyes of most people, $400 is the absolute bottom—it simply can’t go any lower.
After all, this is only the Fed’s second rate hike, so its impact isn’t that significant.
If the international gold price can already break below $400 now, then when the Fed raises rates for the third or even the nth time, won’t the gold price crash back to where it was ten years ago?
Neither Reggie Green nor Li Yi has directly addressed the outside speculation and rumors.
In any case, in the financial markets, what people say doesn’t really matter; in the end, everyone looks at their own investment performance.
……….
The next morning!
Li Yi got up early. After a quick wash, he strolled into the living room.
Downstairs, he saw that Lan Xinyi, Cai Bingyan, and Zhou Xinghua had all arrived—but Li Yunbao was nowhere to be seen.
Li Yi turned to Zhou Xinghua and asked, “Where’s Yunbao? Why isn’t he here?”
Zhou Xinghua grinned and said, “He had a bit too much to drink last night. He hasn’t woken up yet!”
“If he’s had too much to drink, let him sleep in. We’ll head over to the exchange first, and Yunbao can come on his own once he wakes up!” Li Yi said.
As he spoke, a flicker of gratitude crossed Li Yi’s face.
The reason Li Yunbao had gotten himself into such a sorry state was to take the brunt of the drinking for him.
Last night’s cocktail party had been held specifically to welcome Li Yi to Green Brothers, so he was the undisputed star of the event.
To show their welcome, the employees of Green Brothers Company came up one after another to toast him, showing great enthusiasm.
But Li Yi knew that the over 11,000 futures contracts traded this afternoon were merely a test.
If things went as expected, tomorrow would be the real battle!
So, on his way to the reception, he had already decided that no matter what, he couldn’t drink today, lest it interfere with business.
But faced with such enthusiastic employees, he couldn’t very well come across as unapproachable as a new shareholder, so Li Yunbao stepped in to act as his personal “drink-blocker.”
By the end of the reception, Li Yi hadn’t touched a drop, but Li Yunbao had already blacked out.
Afterward, the group had breakfast at the estate and then drove to the futures market!
By the time Li Yi and the others arrived at the futures market, Reggie Green, George, and the others were already there.
Before trading began, Reggie Green briefly briefed Li Yi on the company’s preparations.
Thanks to their efforts yesterday afternoon and evening, they had already secured 80,000 lots of gold futures contracts through interbank borrowing, with over 350,000 lots still in the process of being secured.
If all went as planned, all 440,000 futures contracts would be secured within three days.
After hearing what Reggie Green had to say, Li Yi couldn’t help but be astonished by the efficiency of the New York gold futures market.
These 440,000 futures contracts were worth 20 billion US dollars, and the Green Brothers firm could complete the borrowing in just three days—a speed that was simply unbelievable.
But then again, this was New York—the world’s financial center, a place where capital creates miracles.
And since the New York gold futures market is the world’s largest, it is not impossible to complete the lending of 440,000 gold futures contracts within three days.
Reggie Green’s team has now completed the borrowing of the futures contracts; the real challenge lies in how to sell them off.
With that in mind, Li Yi began discussing the matter with Reggie Green and the others!
……..