The 95-year-old London gold fix, which sets the precious metal’s price for jewellers, miners and traders, may have been rigged for up to a decade, according to the academic who was one of the first to spot Libor rigging.
Professor Rosa Abrantes-Metz of New York University and Albert Metz, managing director of Moody’s Investors Services, said in a paper: “The structure of the benchmark is certainly conducive to collusion and manipulation. It is likely that co-operation between participants may be occurring.” Five banks — Barclays, Deutsche, HSBC, Société Générale and Bank of Nova Scotia — fix the price of gold at 10.30am and 3pm each trading day by teleconference. Deutsche said it would withdraw from the process last month. The other banks declined to comment.
Global regulators have already added metals and commodities pricing to their growing list of potential benchmark rigging. Abrantes-Metz advises the EU and wrote her “Libor Manipulation?” paper in 2008 which uncovered the scandal that has cost banks more than $6 billion (£3.6 billion) in fines and settlements.
