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With gold benchmark fixed, OTC trade eyed as next reform milestone

Section: Daily Dispatches

By Clara Denina
Sunday, November 9, 2014

Calling time on London's century-old gold "fix" could mark the beginning of an even wider industry overhaul that may ultimately dilute the dominance of the highly profitable bilateral over-the-counter trading.

London's bullion price benchmarks, or fixes, were transformed in a matter of months this year as regulatory scrutiny and accusations of market manipulation made price-setting among a handful of banks untenable.

The overhaul spawned electronic price setting platforms for gold, silver, platinum, and palladium, with gold's fate sealed just last week when Intercontinental Exchange were announced as administrators for the prized bullion benchmark in early 2015. ...

More than $5 trillion worth of gold transactions are made over the counter in London every year. The OTC market, where trades are executed via dealer networks as opposed to a centralized exchange, exceeds the trading of gold futures. ...

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