Gold To Rise On “Systemic And Geopolitical Risk” As Price Fixing Ends
GoldCore
Gold Seek.com
Tuesday, 8 July 2014
We featured in an Agence France Presse feature article on the London gold fix yesterday:
Gold To Rise On “Systemic And Geopolitical Risk” As Price Fixing Ends
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.
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 10:30am London time (0930 GMT) and 3:00pm, 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 method of setting gold prices is set to be modernised.
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 Rest…HERE
