LMBA Launches New Global Gold Pricing Standard

The London Bullion Market Association (LBMA) will be launching its new LBMA Gold Price on March 20, replacing the London Gold Fix, the standard global pricing medium that has been used for over a century. The Intercontinental Exchange (ICE) Benchmark Administration will be operating the auction process, and the new price fix could potentially provide a better reflection of China's high gold demand than the London Gold Fix has in years past. More participants means more accurate pricing The London Gold Fix, which will now be discontinued, took into account only four participants. This relatively small sample size left its gold prices open to constant criticism of manipulation and price fixing over the years. The LBMA is pledging transparency in its new gold pricing process, and its electronic auctions will allow as many participants as possible. China gets involved China is expected to be directly involved in the new gold pricing process. China is the world's second largest economy and one of the largest gold buyers in the world. According to Kerr Trading International President Kevin Kerr, China's participation in the new gold pricing process means Chinese gold demand will be truly reflected in gold prices for the first time. "This opens up the playing field for gold trading, and adds an entirely new spectrum of possibilities and participants, mainly the Chinese, on the world stage," Kerr explains. (http://www.marketwatch.com/story/a-key-part-of-the-gold-market-will-see-a-major-shift-friday-2015-03-17) Price fix participants ICE has revealed that Barclays PLC

, HSBC Holdings PLC

, The Bank of Nova Scotia

Societe Generale SA and UBS Group AG

will participate in the new gold price fixing auction. The Wall Street Journal has reported that ICE will reveal a sixth participating bank on the day of the launch. (http://www.wsj.com/articles/six-firms-to-participate-in-fridays-electronic-gold-fix-says-ice-1426789847?KEYWORDS=gold+price+fix) Shares of SPDR Gold Shares ETF

are down more than 30 percent in the past year.