The London LBMA Gold Price benchmarking process has this week added three new participants to its benchmarking process, one of which is the Bank of China. Meanwhile reports indicate that a second Chinese bank (China Construction Bank) is also to be approved for participation among the benchmark setters. It thus looks as though there is an ongoing move to try and maintain the London influence despite the move of gold trade eastwards and continuing accusations of lack of transparency in the process.
It should be recalled that when the new benchmarking process was set up earlier this year there was considerable speculation that up to three Chinese banks, which would seem to meet all the parameters to membership of the elite group of price setters, would be involved. Come the event there was considerable disappointment amongst the gold bulls in particular, and some others, that no Chinese banks were involved. Indeed the initial participants were effectively the same banks which had been participating in the old system. These were subsequently joined by first Goldman Sachs and UBS and then by JP Morgan (See: Red rag to gold bulls – JPMorgan added to LBMA Gold Price Banks) making for a grouping which would raise the blood pressures of those who believe in gold price manipulation by the bullion banks in conjunction with certain central banks as the LBMA participants then comprised virtually all the usual suspects in suggested gold price rigging scenarios……..
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