price of gold set to rise as price fixing under review - gold jewellery set
After a major manipulation scandal, the way gold prices are set is being reviewed.
Source: Century of aplondons-
The old gold price manipulation, influenced by the manipulation scandal, was criticized as the old
Fashioned, this week received attention in key talks aimed at modernizing the process.
Analysts said the price of the gold market, driven by investment and jewelry demand, could climb due to major repairs.
Buyers and sellers of precious metals will meet in London on Monday to discuss the setting of the global benchmark, which will affect the flow of billions of dollars per day around the world.
World gold Association (WGC)
Will host an eager
A long-awaited Forum was held with retail and central banks, exchanges, mining companies, refiners, traders and other industry groups, while the Financial Conduct Authority of the UK (FCA)
The regulator will attend as an observer.
Benchmark gold prices are set by four banks at 10: 30 a. m. London time (0930 GMT)
3: 00 P. M. by conference callThe banks —
Barclays Bank of England, Bank of Scotland of Canada, Industrial Bank of France
They are all members of the gold fixed company and agree to the price twice a day.
Deutsche Bank withdrew from the investigation team earlier this year.
The method of setting the price of gold will be modernized.
Source: AFPThe process starts from so-
Known as the spot price of gold, this is based on the current market interest rate of the metal physical delivery contract.
The four banks then have to state whether they are interested in buying and selling at this level.
Prices may fluctuate depending on the balance between supply and demand and depending onCalled "fix ".
When Barclays was fined more than £ 26 million this year, the system was in crisis.
$45 million, € 33 million)
Before the Fair Competition Act
Traders at the troubled bank admitted they were trying to manipulate gold.
Barclays is one of several banks that have been fined billions of dollars by regulators for manipulating foreign exchange, prompting widespread scrutiny of the setting of global financial benchmarks.
Critics say gold
The pricing process is also vulnerable to abuse.
Mark O'Byrne said: "It lacks transparency, which means that prices may be manipulated to benefit the bank, at the expense of research directors at GoldCore, a producer, trader, investor, jeweler and other market brokerage firms.
"The price should be determined by the supply and demand of the market, not by the bank's decision.
"The process has barely changed since its inception in September 12, 1919, when the five founders of the gold repair company --
Including NM Rothschild & Sons
Agree to a fixed price per day in pounds.
O'Byrne added: "In the modern technological era of electronic trading, gold repair is out of place and it seems inevitable to switch to electronic trading.
At the same time, as supervision and transparency remain important, it will not be a panacea.
Caroline Bain, a senior commodity economist at research consultancy Capital Economics, said transparency was needed to prevent price manipulation.
Therefore, the price of gold jewelry may rise.
Sources: Bain told AFP that "it can be manipulated even if it is based on a real deal . ".
Traders working for institutions involved in the "fix" can conduct trades that affect prices in a way that suits their portfolio.
"There is a lack of transparency about how prices are derived.
This has also led to a wider lack of information on the size of the gold market.
WGC has said the gold market needs greater transparency and auditing of data used to determine fixed prices in London.
According to estimates by commodity research expert CPM Group, two to 4 million ounces of physical gold trading is based on a fixed price for any day.
As early as five years ago, Barclays was fined by the FCA for failing to properly handle conflicts of interest between banks and their customers.
Regulators have identified system and control deficiencies related to fixed pricing of gold in London
Bain added: "This case is more of a problem within Barclays as they do not monitor the activities of traders, but it does highlight the fact that gold fixes can be manipulated.
"The gold market is still facing volatility, as gold is often seen as a safe haven investment at times of geopolitical uncertainty.
Violence in Iraq has intensified in recent weeks as traders fled to the gold market.
Gold jumped to 3 last Tuesday. 5-
London's gold market is priced at $1,424 an ounce a month.
Prices have soared to full
Worried that the global economy would fall into recession again as the eurozone debt crisis raged, the peak in September 2011 was $2052 an ounce.
According to O'Byrne, the market may return to this level again if the repair system is overhauled.
"We believe that more transparent and more reliable fixing measures could lead to higher gold prices, as we suspect that prices are artificially depressed at this time and do not reflect the delicate balance of supply and demand market for physical gold, he told AFP.
"They also do not capture the extent to which systemic and geopolitical risks are present in the world today.