Gold Price Manipulation Was “Routine” FT Reports

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This year we heard the first of many to come examples that gold prices were being manipulated (yes – it is true the gold market has been rigged.)

The FT found that “Trading to influence gold price fix was ‘routine’.”

Precious metal traders in the City of London had plenty to think about When the UK’s financial regulator slapped them with a £26m fine.

The Financial Conduct Authority believes this to be a one off scenario. Many other market professionals have a different view.

>They claim the practice of nudging a tradeable benchmark in order to protect a “digital” derivatives contract – as a Barclays employee did – was routine in the industry.

As a result, customers of Barclays and other market-making banks may be looking to see if they too have cause for complaint, according to one hedge fund manager active in the gold market.

>“If I was at the FCA I would be looking at all banks trading digitals. This could be the tip of the iceberg – there’s a massive issue with exotic derivatives and barriers.”
That, naturally, assumes that the FCA wasnt to catch more manipulators, pardon, “influencers” of gold and other OTC derivative prices. Which is hardly the case: after all one never knows which weakest link rats out the people at the very top: the Bank of England itself, and perhaps even higher: going all the way to the BIS and those who equity interests the BIS protects.

In a recent ruling, the FCA criticized Barclays for its poor controls related to the gold fix and said the bank had failed to “manage conflicts of interests between itself and its customers”.

>“We expect all firms to look hard at their reference rate and benchmark operations to ensure this type of behaviour isn’t being replicated,” said Tracey McDermott, the FCA’s director of enforcement and financial crime.
Still, why did gold manipulation go on for as long as it did? Because the Barclays trader was an amateur, and instead of taking the money of one of the “old boys’ club” participants, ended up robbing an outsider, someone who had the temerity fo lodge a formal complaint.

The identity of the Barclays client has not been revealed.

Are we surprised?


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“Gold Price Manipulation Was “Routine” FT Reports”