The Economist has more on the possible gold market fix, including a discussion of our colleague Rosa Abrantes-Metz’s analysis suggesting possible collusion:
“Another bit of bad news for the gold market comes from a forthcoming paper by Rosa Abrantes-Metz, of New York University’s Stern School of Business, and her husband Albert Metz, a ratings-agency chief (writing in a personal capacity). This identifies a puzzling number of large downward price movements in the run-up to the afternoon fix: a conference call, typically ten minutes long, when the banks exchange information and decide on the price. Ms Abrantes-Metz terms the spikes too frequent and too large to be mere chance.
The couple have previously highlighted problems in other benchmarks, such as LIBOR (the London interbank offered rate). Ms Abrantes-Metz says it is troubling that a small group of people with complete lack of oversight set prices in which they have multiple other interests. The anomalous spikes were not noticeable in the period 2001-03, she notes, but became apparent only after 2004, when the gold-derivatives market expanded sharply.”
For the complete article, see Gold: In a Fix, Mr. Bond