Gold Fix Manipulation Crackdown: Deutsche Officially Resigns London Fix Seat

Gold Fix Manipulation Crackdown: Deutsche Officially Resigns London Fix Seat (ZeroHedge, April 29, 2014):

Three months ago, we discussed the increasingly close eye that regulators were keeping on Deutsche Bank (and in fact many other precious metal fix providers) as manipulation concerns shifted from conspiracy theory to conspiracy fact. At the time, Deutsche – among other banks – had suggested it would relinquish its role on the London Fixing committee and was actively marketing its seat to other LBMA members – it failed to find a willing buyer; the WSJ now confirms…

  • DEUTSCHE BANK SAID TO BE UNABLE TO FIND BUYER FOR GOLD SEAT
  • DEUTSCHE BANK RESIGNS SEAT ON GOLD, SILVER FIX, GIVES TWO WEEKS NOTICE – SOURCE

This is hardly surprising given previous comments that possible manipulation of precious metals “is worse than the Libor-rigging scandal.” but it does leave us wondering who is left to do the manipulating? It seems no one wants to be part of the fixing process (critical for so many derivatives contracts) unless they are allowed to manipulate it to their own needs.

As a reminder, Deutsche is one of five banks involved in the twice-daily gold fix for global price setting.

As Bloomberg reports,

“Deutsche Bank is resigning its position on the gold and silver benchmark setting process,” it says in e-mailed statement today.

Says remains fully committed to precious metals business

So if everyone exits the London fixing market, what happens then?

“It wouldn’t surprise me if the other banks were looking at pulling out as well. Why would they want the aggravation?” said the source, who declined to be named.

“The more worrying point is that, if you don’t have the fixing, what do you have? There’s a lot of contractual business done on the gold fix, and if you’ve got no basis for where the price is, someone is going to lose out.

Well considering that the fixing process over the years was manipulation pure and simple, those who will lose out are the… manipulators? it would seem rather logical. And speaking of manipulation, if indeed Germany is so keen on breaking the manipulators’ back, perhaps it can demand that the pace of its gold returns from the NY Fed and Paris accelerates. It may be surprised at what it finds.

5 thoughts on “Gold Fix Manipulation Crackdown: Deutsche Officially Resigns London Fix Seat”

  1. PUTIN AND THE NEW WORLD ORDER: THE FINAL TURNING POINT: ‘Money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.’ -James Madison
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