- The benchmark rate for the $20T gold market has become the latest focus of regulator scrutiny, with the U.K.'s Financial Conduct Authority looking at how the "London fix" is set, Bloomberg reports.
- In a process that goes back to 1919, the rate is published twice a day following a telephone call between Barclays (BCS), Deutsche Bank (DB), Bank of Nova Scotia (BNS), HSBC (HSBC) and Societe Generale (SCGLY).
- The process can last up to over an hour, with participants being able to use the information from the call to trade gold and its derivatives while the discussion is taking place.
- "It's controlled by a handful of firms with a direct financial interest in where it's set, and there is virtually no oversight - and it's based on information exchanged among them during undisclosed calls," says Rosa Abrantes-Metz of New York University.
- ETFs: GLD, IAU, PHYS, SGOL, UGL, DGP, GLL, DZZ, UGLD, DGL, GLTR, DGZ, AGOL, DBP, GLDI, DGLD, WITE, FSG, TBAR, JJP, UBG, RGRP, BLNG
U.K. scrutinizes how price of gold is fixed
Nov 26 2013, 04:12 ET