US regulators may look at London gold price setting

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US regulations may launch an official investigation into whether prices gold and silver prices are being manipulated in London, the Wall Street Journal reported citing sources familiar with the situation.

While no formal investigation has been launched yet, the Commodity Futures Trading Commission (CTTC) is looking at issues including whether the setting of prices for gold and silver are transparent.

The system of setting gold prices in London is determined by a twice-daily teleconference call involving five banks while silver is set by three lenders. The price fixings are then used to determine prices worldwide, from the cost of jewellery to how much mining companies can earn selling raw materials to refineries.

The news of a potential inquiry comes as regulators expand their review of global financial benchmarks in the wake of the interest-rate rigging scandal. Regulators have fined three banks more than US$2.5bn after an investigation into the process used to determine the London interbank offered rate, known as Libor, uncovered manipulation.

Spot gold reached $1,591.90 an ounce on Friday, marking the second straight weekly gain as the euro firmed and US and European shares fell.

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Posted by: realiste

I think this ultruism should be extended to all commodities and in particular oil prices too.
Or is it asking too much to be fair?

Posted by: Sam

Seems the Brits did not agree to the increased commission demands of their cousins across the Atlantic.

Come on Brits...with the Fiscal Cliff, and all the challenges your cousins are facing, they are arguing that you should have been a bit more generous. I know the almost $20+Billion slap on BP hurt, but I guess they want you to do more...

They say you can't choose your relatives; but if you think hard enough I bet you just might be able to figure a way out. Good luck!

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