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Chinese banks go after silver and gold fix

Chinese banks go after silver and gold fix

Several Chinese banks have reportedly approached the London Bullion Market Association (LBMA) in the last few days looking to be part of the silver pricing benchmark.

The financial institutions, however, are waiting to see who will be awarded the administration of the gold fix before they decide whether to also take part in the twice-daily gold pricing sessions, The Bullion Desk reports.

The LBMA began using a new, electronic price-setting process for London’s precious metals market in August, using an algorithm to set the benchmark price for silver.

But so far only five participants have signed up to the new process, with JPMorgan Chase joining on Monday. The LBMA Silver Price replaces a closed teleconference run by member banks, criticized for being opaque and vulnerable to manipulation, which was effectively killed off in April.

The LBMA-led search for an alternative for both the gold and silver fix came as market regulators had been scrutinizing benchmarks across the financial sector in the wake of a scandal involving rigging of interest rates.

Image by Robert Baxter | Flickr Commons.