The 95-year old London Gold Fix has finally found a new administrator. ICE Benchmark Association will conduct the daily pricing auctions starting early next year, the London Bullion Market Association announced today.
The “gold fix” has been in place since 1919 and was originally conducted in the offices of N.M. Rothschild and Sons until 2004 when the process was switched to a secure telephone conference call. The gold fix is a twice-daily agreed-upon gold price that provides a convenient benchmark for gold transactions.
Calls to reconfigure the daily benchmarks for all precious metals came earlier this year after multiple allegations of illegal price manipulation were brought forth.
The new benchmark system will be conducted via the WebICE technology platform, an electronic auction with transactions available in three possible currencies: USD, GBP, and EUR. Bids will be aggregated and updated in real-time with the imbalance calculated every 30 seconds.
The ICE Benchmark Association will conduct all necessary oversight, systems, and controls. Participants will be able to manage their front office, compliance, and credit risk using the tools available with the WebICE platform.
The President of ICE Benchmark, Finbarr Hutcheson said: “We are delighted to have been selected by a combination of the LBMA and their members as the new administrator of the LBMA Gold Price. We look forward to working closely with the LBMA and the precious metals industry as we deliver an IOSCO-compliant benchmark that fulfils the requirements of market participants in an efficient and transparent manner.”
In August, ICE Benchmark Association became the new administrator for ISDAFIX, for the International Swaps and Derivatives Association.
The new silver benchmark administrator was also announced in August with CME Group and Thomson-Reuters jointly-administering a similar electronic auction system.