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Gold Fix Manipulation Attracts Multiple Lawsuits
Posted May 7th, 2014
Los Angeles CA, May 7 (Tangible Investments) - by James O’Dell - Gold is in consolidation mode above the $1,300 an ounce level, after easing a modest $1.85 or 0.14 percent to close at $1,307.40 an ounce on Tuesday, as investors await the Congressional testimony of Fed Chief Janet Yellen, which could favor gold if the dollar continues to remain under pressure.
"Markets will be attentive for any indication on the Fed's thinking in terms of rate hike timing and pace," said BNP Paribas in a note. Silver slipped modestly, losing $0.02 or 0.10 percent to close at $19.57 an ounce, while the gold/silver ratio dipped to 66.81.
More than 20 plaintiffs gathered on Monday at the Federal District Court in New York, to coordinate their claims against the five Gold Fixing bullion banks, Barclays, SocGen, ScotiaBank, Deutsche Bank and HSBC, that the twice daily Gold Fix was open to manipulation. Deutsche Bank recently announced that it was resigning its seat on the price fixing panel, because it was unable to find a buyer, most likely due to the lawsuits.
The lawsuits are being pursued by various groups of public and private investors, and hedge funds, and they claim that the unregulated banks involved in the price fixing can manipulate the gold price because gold and gold derivatives are being traded during the twice daily Fixing calls. The first lawsuit was filed in March by a former New York gold trader, since then however, multiple lawsuits have been filed, and it has led to the search for a lead attorney.
The sheer number of attorneys involved appeared to overwhelm the presiding judge, Valerie Caproni, who attempted to bring some order to the proceedings when she said “I want to do this in an organized way to figure out who’s who.” Adding quickly, “Not, that I’ll remember.”
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