LONDON–JPMorgan Chase & Co. (JPM) has become the seventh direct participant in the twice-daily auctions to set the LBMA Gold Price benchmark, according to the price administrator, Intercontinental Exchange Inc. – LINK
The more things “change,” the worse they become. After Deutsche Bank dropped out of the old LBMA gold fix, the remaining “price fix” banks were: HSBC, Barclays, Bank Nova Scotia (Scotia-Mocatta) and Soc Gen.
With JP Morgan now announced as the seventh direct participant, here’s the list of participants: HSBC, Barclays, Bank Nova Scotia, Soc Gen, UBS, Goldman and JPM.
Can someone explain to me how this is supposed to be an improvement over the old fix? Does anyone trust any of these banks? All seven of them would have – and should have – collapsed in 2008. The world would be a better place if that had been allowed to happen.
All of them (except somehow maybe Goldman) have been prosecuted and fined for manipulating interest rate and foreign exchange markets. Is anyone really stupid enough to believe that these banks will conduct the business of fixing the gold price in London in a fair and honest manner.
The fact that the new system is now electronic does not “fix” anything. In fact, as we have seen ad nauseum with anything and everything connected to the cyberworld (think: HFT trading) it’s easier to rig something electronically than manually.
I have heard conflicting accounts about reasons China does not have a seat on the new gold price fix committee. The most credible is that China did not seek to have bank representation. Instead, China is going to roll out its own yuan-based gold fix mechanism sometime later this year.
Myself and all of my colleagues who have been researching, studying, trading and investing in the precious metals sector since at least 2001 (GATA founded in 1998) all agree that the last three years have seen, by far, the most aggressive, egregious and blatant effort by the Fed/U.S. Government – in conjunction with the EU Central Banks – to manipulate the precious metals market in order to support the massive money printing schemes being used to finance Government spending, keep the banks from collapsing and finance illegal wars.