The Hong Kong Commodity Exchange, which was recently established in 2008, officially made an offer to acquire the London Metal Exchange (LME). It is said that this move is to help China, the world's largest gold importer and consumer, gain pricing power. In addition, The LME is also the world's largest base metal exchange, and its trading results are decisive for the formation of base metal prices. But it is obviously very difficult to achieve pricing power.

How can London gold, a commodity with an average daily trading volume of US$30 billion, compete for pricing power through a neutral institution such as an exchange? The result is that relevant institutions in my country are still required to influence prices through market transactions, which obviously has nothing to do with the ownership of the exchange. Perhaps the competition for pricing power is secondary, and the more important thing is "the meat is rotten in the pot." In the face of the continued growth of domestic gold fever, the acquisition of the LME will help to obtain more profits and relax investor access thresholds based on the Chinese concept.