truthingold.com / Dave in Denver / July 3, 2014 at 10:53
Speaking to a committee of UK lawmakers, Bailey repeatedly refused to be drawn on which benchmarks in the financial system were particularly vulnerable to efforts at manipulation, but he added that it was “possible” for all of them. “The important thing is that the process by which they are fixed is robust,” he said.
The gold and silver fixes provide daily benchmarks used, for example, by miners to settle sales contracts and to price such derivatives as exchange-traded funds. In use since 1919 and 1897 respectively, they have recently been set by way of conference calls among banks — four for gold and three for silver.
But they too have been a subject of regulatory scrutiny as part of the broader examination of financial benchmarks.
The silver fix is being scrapped for something more modern as seven parties vie to host a new fix system when the current fix ends August 14. The situation took on some urgency in April when Deutsche resigned its seat on both the gold and silver fix panels. Meanwhile, the WGC has invited the bullion industry to a July 7 meeting observed by the Financial Conduct Authority on the future of the gold fix.