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Economy
In reply to the discussion: Weekend Economists Examine the Root of All Evil: February 28-March 2, 2014 [View all]Demeter
(85,373 posts)5. Gold Fix Study Shows Signs of Decade of Bank Manipulation (repost with different emphasis)
http://www.bloomberg.com/news/2014-02-28/gold-fix-study-shows-signs-of-decade-of-bank-manipulation.html
...The rate-setting ritual dates back to 1919. Dealers in the early years met in a wood-paneled room in Rothschilds office in the City of London and raised little Union Jacks to indicate interest. Now the fix is calculated twice a day on telephone conferences at 10:30 a.m. and 3 p.m. London time. The calls usually last 10 minutes, though they can run more than an hour.
Unregulated Process
Firms declare how many bars of gold they want to buy or sell at the current spot price, based on orders from clients and themselves. The price is increased or reduced until the buy and sell amounts are within 50 bars, or about 620 kilograms, of each other, at which point the fix is set.
Traders relay shifts in supply and demand to clients during the call and take fresh orders to buy or sell as the price changes, according to the website of London Gold Market Fixing, where the results are published. At 3 p.m. yesterday, the price was $1,332.25 an ounce. The process is unregulated and the five banks can trade gold and its derivatives throughout the call.
Bloomberg News reported in November concerns among traders and economists that the fixing banks and their clients had an unfair advantage because information gleaned from the calls provided an insight into the future direction of prices and banks can bet on spot and derivatives markets during the call....
...The rate-setting ritual dates back to 1919. Dealers in the early years met in a wood-paneled room in Rothschilds office in the City of London and raised little Union Jacks to indicate interest. Now the fix is calculated twice a day on telephone conferences at 10:30 a.m. and 3 p.m. London time. The calls usually last 10 minutes, though they can run more than an hour.
Unregulated Process
Firms declare how many bars of gold they want to buy or sell at the current spot price, based on orders from clients and themselves. The price is increased or reduced until the buy and sell amounts are within 50 bars, or about 620 kilograms, of each other, at which point the fix is set.
Traders relay shifts in supply and demand to clients during the call and take fresh orders to buy or sell as the price changes, according to the website of London Gold Market Fixing, where the results are published. At 3 p.m. yesterday, the price was $1,332.25 an ounce. The process is unregulated and the five banks can trade gold and its derivatives throughout the call.
Bloomberg News reported in November concerns among traders and economists that the fixing banks and their clients had an unfair advantage because information gleaned from the calls provided an insight into the future direction of prices and banks can bet on spot and derivatives markets during the call....
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Weekend Economists Examine the Root of All Evil: February 28-March 2, 2014 [View all]
Demeter
Feb 2014
OP
Gold Fix Study Shows Signs of Decade of Bank Manipulation (repost with different emphasis)
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I'll give you all a chance to catch up, and let X and others handle posts for a bit!
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