* Swiss competition body opens precious metals market probe
* Looking at possible collusion in prices by some banks
* Banks include UBS, Julius Baer, Deutsche and Barclays (Adds comment from Mitsui, changes date to Sept 29)
By Joshua Franklin and Jan Harvey
ZURICH/LONDON, Sept 29 (Reuters) - The Swiss competitionwatchdog has launched an investigation into possible collusionin the precious metals market by several major banks, it said onMonday, the latest in a string of probes into gold, silver,platinum and palladium pricing.
Global precious metals trading has been under regulatoryscrutiny since December 2013, when German banking regulatorBafin demanded documents from Deutsche Bank under an inquiryinto suspected manipulation of gold and silver benchmarks bybanks.
Even though the market has moved to reform the process ofdeciding on its price benchmarks, accusations of manipulationhave refused to go away.
Gold prices have also shed some 9 percent in the last twoyears as investors lose faith in its status as a store of value.
Switzerland's WEKO said its investigation, the result of apreliminary probe, was looking at whether UBS, JuliusBaer, Deutsche Bank, HSBC,Barclays, Morgan Stanley and Mitsui conspired to set bid/ask spreads.
"It (WEKO) has indications that possible prohibitedcompetitive agreements in the trading of precious metals wereagreed among the banks mentioned," WEKO said in a statement.
A WEKO spokesman said the investigation would likelyconclude in either 2016 or 2017, adding that the banks weresuspected of violating Swiss corporate rules.
The banks face financial penalties if WEKO finds them guiltyof wrongdoing, the spokesman said, though he declined to commenton the size of any possible fine.
WEKO could add more banks to its investigation if it findscause for suspicion, the spokesman said.
The move comes a month after press reports that the EuropeanUnion's competition regulator was investigating anticompetitivebehaviour in precious metals spot trading, and follows news of aU.S. probe by the Department of Justice (DoJ) and the CommodityFutures Trading Commission earlier this year.
U.S. authorities are investigating at least 10 major banksfor possible rigging of precious metals markets, according toreports. HSBC and Barclays said earlier this year that they werecooperating with the investigation.
Aside from regulatory probes, a number of lawsuits have alsobeen filed in U.S. courts alleging a conspiracy to manipulateprecious metals prices.
Commenting on the WEKO probe, a Julius Baer spokesman saidthe bank was cooperating with authorities.
In a statement, Deutsche Bank said it was cooperating withrequests for information from "certain regulatory authorities"over precious metal benchmarks but declined to comment further.A Mitsui spokesman in Tokyo said the firm would cooperate withthe Swiss authorities in its investigation.
Representatives for UBS, Barclays, Morgan Stanley and HSBCdeclined to comment.
PRESSURE RISES AFTER LIBOR
Scrutiny of precious metals pricing ramped up with the LIBORscandal in foreign exchange markets. In May, four major bankspleaded guilty to trying to manipulate forex rates and, with twoothers, were fined nearly $6 billion in another settlement in aglobal investigation into the $5 trillion-a-day market.
A push for more transparency in precious metals saw bankslast year abandon existing benchmark prices, including thecentury-old "gold fix", which had been set twice a day via atelephone auction, in favour of a physically settled electronicsystem.
The benchmarks were used by miners, refiners, traders andend-users to price gold and silver, as well as platinum andpalladium, which are chiefly used in autocatalysts.
Last year Swiss financial regulator FINMA said it had founda "clear attempt" to manipulate precious metals price benchmarksduring a cross-market investigation into trading at UBS.
As part of ongoing obligations imposed by FINMA, UBS isseeking to automate at least 95 percent of its global foreignexchange and precious metals trading by the end of 2016.
The UK Financial Conduct Authority (FCA) last year finedBarclays 26 million pounds ($43.8 million) for failures ininternal controls that allowed a trader to manipulate how goldprices were set.
Germany's Bafin has also investigated the gold market, butsaid earlier this year that it had found no signs of benchmarkprice manipulation.
The impact of the probes on wider precious metals tradingwas likely to be muted, according to Brian Lucey, professor offinance at the School of Business, Trinity College Dublin.
"The question is not if individuals, or groups ofindividuals are collaborating to rig the game for themselves,the question is if this has any material effect," he said.
"I'm not convinced collusive behaviour will have ameaningful effect micro-economically to the structure of goldtrading around the world." (Additional reporting by Kathrin Jones in Frankfurt, SteveSlater and Clara Denina in London and Yuka Obayashi in Tokyo;Editing by Dale Hudson, Veronica Brown and Adrian Croft)