The London gold fix, the benchmark used by miners, jewellers and central banks to value the metal, may have been manipulated for a decade by the banks setting it, researchers say.
Bloomberg reports that unusual trading patterns around 3 p.m. in London, when the so-called afternoon fix is set on a private conference call between five of the biggest gold dealers, are a sign of collusive behaviour and should be investigated, New York University’s Stern School of Business Professor Rosa Abrantes-Metz and Albert Metz, a managing director at Moody’s Investors Service, wrote in a draft research paper.
'The structure of the benchmark is certainly conducive to collusion and manipulation, and the empirical data are consistent with price artificiality', they say in the report, which hasn’t yet been submitted for publication. 'It is likely that co-operation between participants may be occurring'.
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