London (AFP) - London's century-old process for fixing gold prices, tainted by a rigging scandal and attacked by critics as old-fashioned, goes under the spotlight this week in key talks aimed at modernising the process.
UK watchdog says no evidence that gold price is rigged Reuters World Gold Council Says 'Gold Fix' Reform Won't Happen Quickly TheStreet.com China, Singapore vie for Asia gold pricing alternative to London Reuters Deutsche Bank conducts internal probe into trading on gold "fix" Reuters
Analysts said that the market price of gold, which is driven by investment and jewellery demand, could climb as a result of an overhaul.
Buyers and sellers of the precious metal will meet in London on Monday to discuss the setting of the global benchmark, which affects the flow of billions of dollars worldwide every day.
The World Gold Council (WGC) will host an eagerly-awaited forum with retail and central banks, exchanges, mining firms, refiners, traders and other industry groups, while Britain's Financial Conduct Authority (FCA) watchdog will attend as an observer.
The benchmark gold price is set by four banks at 10:30 am London time (0930 GMT) and 3:00 pm, via teleconference.
The banks -- Britain's Barclays and HSBC, Canada's Scotiabank and Societe Generale of France -- are all members of the Gold Fixing Company and agree the price twice daily. Germany's Deutsche Bank pulled out of the panel earlier this year.
The process begins with the so-called spot price of gold, which is based on the current market rate of contracts for physical delivery of the metal.
The four banks must then declare whether they are interested in buying or selling at this level. The price can fluctuate depending on the balance of supply and demand, and settles on a so-called "fixing".
The system lurched into crisis this year when Barclays was fined more than Â£26 million ($45 million, 33 million euros) by the FCA after a ex-trader at the troubled bank admitted attempting to manipulate the gold price.
Barclays is among several banks that were fined billions of dollars by regulators foreign exchange rigging, prompting a broad review of how global financial benchmarks are set.
Critics argue the gold-price fixing process is also open to abuse.
"It lacks transparency, which means prices can be rigged to benefit banks, at the expense of producers, traders, investors, jewellers and other market participants," said Mark O'Byrne, research director at broker GoldCore.
"Prices should be determined by market forces of supply and demand and not due to a bank's determination."
The process is little changed since its creation on September 12, 1919, when the Gold Fixing Company's five founders -- including NM Rothschild & Sons -- agreed one single daily price fix in British pounds.
O'Byrne added: "The gold fix is anachronistic in the
Clearly some confidence in this share. I expect this is the first of some sizeable positions to be taken in the build up to MGA news. The BB is back with activity and interest and for the 2nd trading day in a row ECR is in the highest volumes, although these are likely to increase significantly in the next few days. I have waited patiently for some time, as have many others who know the potential here, for developments but glad to be a part of what is likely to be an interesting and exciting future here. There are some good posters on this BB. GLA holders.
Gold sales from Australia’s Perth Mint, which refines all the output in the world’s second-biggest producer of the precious metal, hit the highest level in four months last month, driven by a rally in prices that stimulated demand.
Sales of gold coins and minted bars rose to 39,405 ounces from 36,127 ounces in May and the most since February, according to data from the mint published by Reuters. In comparison, the mint sold 47,692 ounces in June last year.
US sales, instead, went downhill, with American Gold and Silver Eagle bullion coins dropping when compared to the same period in 2013. The decline for the silver comes as the US Mint recently lifted their allocation program, which had been limiting the number of coins authorized purchasers were able to order.
there is no way in hell the 1 mm would hold 8M shares in stock at one time to fill that order in one go
someone at 8 am this morning or before placed the 8M order and the mm who took the order has worked the bid all day to fill it.....hence why we were up so much and seen it drop bit by bit. It encouraged the sells early on to fill this order
8 million accounts for circa 12% of the total days trading volume.....thats why the price wouldnt rise much with all the buying
whilst not ideal, I see the low percentage gain as a positive. I wouldn't like to see huge rises which encourage non investors to sell off for a quick buck £21k buy after hours obviously shows someone has alot of confidence in ECR
MGA will definitely bump the base value of ECR up, I'm hoping by £3-4m in market cap terms.
Datafeed and UK data supplied by NBTrader and Digital Look.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.