New product finance "can be next bubble", FSA has warned

Traders contend that existing physical FNB success, including gold, convert to other metals photo: Alamy

Several metal traders and experts have written for the city saying that licensing watchdog-the so-called physically backed exchanged currency funds (ETFs), which banks including Goldman Sachs, JP Morgan and Deutsche Bank have said they plan to launch soon, may be "to approve the financial bubble next".the traders concerns are based on ETFs model will require investments backed by physical metal such as copper, lead, aluminum and nickel rather than paper assets offered by contract term.

They argue that the existing physical success of ETFs, including gold, convert to other metals. Metal experts warn that investors will face expensive shipping, storage and disposal costs which are likely to take lion's share of the investment gains.

They say also that ETFs could distort markets everywhere in the Daily Telegraph said trader monde.Un: "metals as copper is intense demand."By purchasing contract term, investors have never affected, physics cost or the supply of copper.But allowing investors to accumulate physical supplies is equivalent to allow investors to sit on wheat warehouse while Tesco is far from bread.»

It is estimated that if copper provided funds are fully supported that they seek to purchase more than half of total stocks Morgan LME.JP warehouses and Goldman Sachs refused commenter.Un spokesman for Deutsche Bank stated that ETFs had "not yet launched."Another source close to one of the banks said: "these fears are exagérées.Les markets of metal have strict rules in place to prevent these kinds of manipulations.".

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