Gold fix revamp to resist fiddling

Tim Wallace
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A NEW gold price benchmark will launch next month under the auspices of the Intercontinental Exchange group (ICE), replacing the near-century old gold fix.

The London Bullion Market Association (LBMA) Gold Price should have more participants than the outgoing fix, which is set by just four banks. The pool of banks will be much wider, with Chinese banks taking part for the first time.

It will be set through electronic auction bids, rather than phone submissions.

The groups behind the new benchmark hope it will free the index from the taint of scandals which have hit the forex and Libor benchmarks.

ICE will monitor auction bids in an effort to identify any anomalous pricing or trading patterns, to protect the benchmark from manipulation.

“Expanding the number of participants in the auction will increase the transparency and robustness of the data used to calculate the benchmark, giving a better representation of the market price,” said ICE Benchmark Administration’s Finbarr Hutcheson.