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Is The Gold Fix Being Manipulated? Researchers Say It Is
Posted March 3rd, 2014
Los Angeles CA, Mar 3 (Tangible Investments) - by James O’Dell - Gold gained more than one percent, and breached the $1350 an ounce level in overnight trade after Putin won parliamentary approval to send troops into Ukraine. The precious metal eased $6.22 or 0.47 percent on Friday to close at $1,324.98 an ounce, even as gold saw its biggest monthly gain in seven months, and its second monthly gain in a row. Silver dipped $0.06 or 0.28 percent to close at $21.27 an ounce.
Bloomberg calls the situation in Ukraine “one of the most serious since the Cold War ended, boosting demand for havens such as Treasuries and gold. . .” Ukraine prepared for war on Sunday while the U.S. threatened economic sanctions after Russia's President Putin declared his nation was justified in invading the Ukraine's Crimean peninsula.
"This is not a threat: this is actually the declaration of war to my country," announced Ukrainian Prime Minister Arseny Yatseniuk in English, and it has pushed the country to "the brink of disaster." Secretary of State John Kerry will visit Kiev this week to show "strong support for Ukrainian sovereignty, independence, territorial integrity, and the right of the Ukrainian people to determine their own future, without outside interference or provocation," said the State Department.
Meanwhile, the London gold fix, the benchmark used by the industry to value the metal, may have been manipulated for a decade by the very banks that were entrusted with setting it, say researchers. Unusual trading patterns have been detected at the same time the afternoon fix is set between five of the biggest gold dealers on a private conference call, and it appears to be collusive behavior and should be investigated, say New York University’s Stern School of Business Professor Rosa Abrantes-Metz and Albert Metz.
“The structure of the benchmark is certainly conducive to collusion and manipulation, and the empirical data are consistent with price artificiality,” says in the report, which has not yet been published.
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