3 newcomers for gold price fixing
The cutting edge electronic platform for gold price setting has been operating already for 4 months. The main reason for the change from London Gold Fixing to the new platform, was the aim of the participating banks to guarantee the gold price setting was carried out above board.
The participating banks in question are Goldman Sachs, UBS Barclays, HSBC, Bank of Nova Scotia, Société Générale and JP Morgan, which electronic platform for gold price setting is managed by ICE Benchmark Administration.
When the list was published, experts wondered whether the non-participation of Eastern banks was on purpose; nevertheless all doubts were dispelled after the Bank of China was announced as the 8th bank participating in the setting of physical gold price.
According to BOC general manager Yu Sun's words, the Bank of China joined the LBMA in 1987 and, as China is the world's second largest gold consumer and the main producer, its participation was mandatory. Let's not forget this benchmark is used by producers, consumers and investors worldwide.
A few days later, Morgan Stanley and Standard Chartered were introduced as the 9th and 10th members in this electronic platform. As if this were not enough, there are rumours regarding the possibility of China Construction Bank to become the 11th member.
As Finbarr Hutcheson, ICE Benchmark Administration's president, said "these enhancements are encouraging more firms to participate and contribute valuable liquidity to the benchmark setting process." As a matter of fact, since the establishment of this new platform, volumes of gold traded have increased significantly.
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