LBMA gold pricing anomaly

It may not have gone unnoticed by readers of lawrieongold that just over a week ago there was a major discrepancy between the LBMA Gold Benchmark price published in London and the prevailing spot gold price at the time.  This should not be able to happen.  In a detailed article, Bloomberg’s Shelley Goldberg describes how this came about and what is being done to avoid it happening again:

Gold Trading Systems Experience Growing Pains

On the afternoon of April 11, London’s daily gold price benchmark fix took a peculiar turn: It was about $12 under the spot price. The auction appeared to be stuck on a descending escalator from an initial $1,265.75, before fixing at $1,252.90.

Such a discrepancy affects many participants in the global gold markets — hedgers and speculators, along with miners, refiners and jewelers, as well as banks and portfolio managers. But there was no mention of fat fingers. The initial reports attempting to explain this anomaly pointed to a new algorithm that U.S.-based Intercontinental Exchange, known as ICE, began using to determine prices, as a replacement for the standard auction chair setting the price………….

To read full article click here

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