U.K. scrutinizes how price of gold is fixed


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.

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Comments (10)
  • bfmil
    , contributor
    Comments (211) | Send Message
     
    Like this is news ?
    26 Nov 2013, 05:30 AM Reply Like
  • stoj
    , contributor
    Comments (769) | Send Message
     
    ETF the process, let the market over ride them
    26 Nov 2013, 07:34 AM Reply Like
  • EuricoIFConsultant
    , contributor
    Comments (38) | Send Message
     
    The question is how to reduce manipulation, as we know that it will always have manipulation in any financial market. An interesting video on this: http://bit.ly/1fFMxXO
    26 Nov 2013, 08:52 AM Reply Like
  • minecanary
    , contributor
    Comments (1241) | Send Message
     
    Wait until they 'discover' that people in most gold ETF's own nothing but a piece of paper
    26 Nov 2013, 09:33 AM Reply Like
  • Ishi Kenjo
    , contributor
    Comments (311) | Send Message
     
    Your idea is so revolutionary minecanary, yeah right! As if paper value of assets means jack. If it did, the non-gold backed Dollar might be valueless. If it did, people would have priced gold above $2500 with the secrecy on emptying national gold vaults in U.S. and numerous other countries. If the U.S. has a huge supply they wouldn't have told Germany to wait 7 years for the return of their 300 tons of leased gold that they are demanding be returned to them.
    26 Nov 2013, 11:52 AM Reply Like
  • minecanary
    , contributor
    Comments (1241) | Send Message
     
    Ishi, From your response I can't twell which side of the argument you are taking...but the US dollar is well on it's way to becoming valueless; even more so then what the FED is trying to accomplish w/it's printing. I suspect we will also find out all the gold is long gone.
    27 Nov 2013, 09:32 AM Reply Like
  • moreofthesame
    , contributor
    Comments (739) | Send Message
     
    When is all this banking madness coming to an end? Do we really need more CDS type worthless papers running amok between greedy hands only 5 years after the biggest melt down ever?? My feeling is the banks won't stop until the people make them, the "let them eat cake, version 2.0" era may once again come to an end sooner than later.
    26 Nov 2013, 11:53 AM Reply Like
  • MisterJ
    , contributor
    Comments (1173) | Send Message
     
    I think we should officially outlaw gold to finally put an end to the "gold is manipulated" nutcase conspiracy theories. Nothing else will help.
    26 Nov 2013, 12:37 PM Reply Like
  • bfmil
    , contributor
    Comments (211) | Send Message
     
    MisterJ,

     

    I suggest you give yourself a history lesson by reading the article posted to SA below.

     

    Is The Gold Market Manipulated? Part 1: Introduction And The London Gold Pool
    Saturday, November 23, 6:07 PM ET | About: GLD

     

    Ben Kramer-Miller
    26 Nov 2013, 03:29 PM Reply Like
  • EuricoIFConsultant
    , contributor
    Comments (38) | Send Message
     
    In the end, this is the manipulation that matters:

     

    http://bloom.bg/18Hx0m6
    27 Nov 2013, 01:06 PM Reply Like
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