The head of the London Metal Exchange spoke at a conference on Tuesday to discuss the process of setting gold pricing benchmarks, telling reporters that the methods are vulnerable to manipulation.
LME Chief Executive Garry Jones said the London fix is “obviously…open to manipulation” in the way the benchmark is currently determined. The data is set twice daily by several banks that discuss metal prices based on client transactions, according to reports.
The LME is now competing to establish an alternative to the silver fix, which is set to be disbanded in August. Deutsche Bank started the catalyst for the fix’s demise when it announced earlier this year that it would leave the group of banks that set the benchmark. A replacement could not be found.
But the LME announced last month that it is in discussions with the London Bullion Market Association to find a new, electronic-based method of setting silver benchmarks that are not as vulnerable to manipulation.
Full content: Reuters
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