Is the London Gold Fix Going to be Scrapped?
In May, as I discussed recently, London Silver Market Fixing announced that the London silver fix will end on August 15. Since then many precious metal watchers have been asking if the London gold fix will also come to an end.
In addition, the UK’s Financial Conduct Authority or FCA said recently that while it is possible manipulation of gold prices has taken place, it found “no clear evidence” that the major banks involved in setting the gold fix were colluding with each other.
A new article in Gold Investing News explains that there are three basic perspectives on the gold fix: “those who think the gold fix needs replacing, those who think it should be modernized, and those who believe it is fine as it is.”
The article also notes that during a recent discussion of gold industry members at the World Gold Council, “there was no real view from anyone in the room that the gold fix should be abandoned and we should start redesigning it from scratch.”
So it appears that reform of the gold fix is the most likely outcome, especially since gold market participants play such a major role in this area.
In a survey of readers of Gold Investing News, 64.7% favored getting rid of the gold fix, 29.41% said get rid of it, and about 6% said either leave it as it, or other, as of July 11. These results, when compared to what market players favor, show how opinion is strongly divided on the issue, depending on whether you are in or outside the market.
It is also worth noting, or reinforcing, a point I have made before, which is that many observers have always argued that manipulation of silver prices has been more blatant than gold price fixing, something which regulators on both sides of the Atlantic seem to agree with.