The new London Gold ‘Fix’ being implemented with undue haste?
London (Feb 2) The announcement that the new LBMA Gold Price benchmarking system will commence in March this year may bring this in sooner than might be considered ideal. Is the LBMA worried about potential competition from Asia in the setting of a new global gold benchmarking system?
Some additional details have now been announced regarding the replacement for the London Gold Fix. The new electronic system which is to replace the Fix is to be named The LBMA Gold Price (although one suspects that the media may continue to call it the London Gold Fix) and the new system is due to be implemented at a so far unspecified date in March this year.
An announcement from the company selected to handle the new London benchmark pricing process, Intercontinental Exchange (ICE), and from the London Bullion Market Association (LBMA), which made the decision to appoint ICE to manage the pricing mechanism to replace the nearly century old Gold Fixing process which had come under considerable criticism as being too opaque and potentially subject to manipulation, was released Monday. Among other things it noted that ICE Benchmark Administration (IBA), as the administrator for what will now be known as the LBMA Gold Price, will transition to a physically settled, electronic and tradeable auction, with the ability to participate in three currencies: USD, EUR and GBP. Within the process, aggregated gold bids and offers will be updated in real-time with the imbalance calculated and the price updated every 30 seconds. IBA will use ICE’s widely distributed front-end, WebICE, as the technology platform which will allow direct participants, as well as sponsored clients, to manage their orders in the auction in real time via their desktops.