Century-old gold price 'fix' swept away with ICE platform
By Clara Denina
LONDON (Reuters) - ICE Benchmark Administration will run the century-old London gold price benchmark, or "fix", from the first quarter of 2015, switching to a new electronic system that will remove the last bastion of tradition in precious metals benchmarking.
The London Bullion Market Association (LBMA), the body in charge of finding an alternative method to the gold "fix", said on Friday that IBA will provide a physically settled, electronic and tradeable auction for what will become the LBMA Gold Price.
"We look forward to working closely with the LBMA and the precious metals industry as we deliver an IOSCO-compliant benchmark that fulfils the requirements of market participants in an efficient and transparent manner," ICE Benchmark Administration President Finbarr Hutcheson said.
Since 1919 and up until 2014, representatives from a handful of banks had agreed a price daily on which their customers - producers, consumers and investors - could trade and value the metals.
But a regulatory push for more transparency has heralded a move to electronic solutions that display selling and buying order volumes.
The first precious metals benchmark to undergo reform was silver, after Deutsche Bank said in January it would withdraw from the gold and silver fixes after two decades.
A number of companies had taken the chance to propose their alternatives for the silver and platinum fixes, but they always had in mind the bigger prize - gold. Gold is the biggest precious metals market, whose over the counter trade is worth around $200 billions a day.
The Chicago Mercantile Exchange , jointly with Thomson Reuters , were named as the new operators of an auction-based silver price in August, while the London Metal Exchange will run the platinum and palladium fixes from December.
(Editing by Veronica Brown and Michael Urquhart)
