The CTTC could launch investigation into the way gold and silver prices are set in London
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.