RE:Fix must be fixed... Here Doug Casey's team addresses this issue.
Goldguy
Link to article
https://www.caseyresearch.com/cdd/qa-with-the-casey-metals-team
Q&A with the Casey Metals Team
Jeff Clark, Senior Precious Metals Analyst
As you might surmise, we get a lot of questions about the precious metals market. Given the popularity of our recent article ‘What Casey Research Staff Are Buying This Summer,’ we decided to address a few recent queries…
Q: Should I be worried about the silver fix disappearing? Could this happen to gold?
Jeff Clark: The London Bullion Market Association (LBMA) decided to do away with the 117-year-old silver fix process after allegations of manipulation and Deutsche Bank’s subsequent withdrawal as one of the constituents. That left only two banks on the panel, an insufficient number if they wanted to continue the tradition. A process is thus underway to determine a new daily benchmark price, which is important since many entities need an agreed-upon price for large transactions.
There are a number of entities jostling to be the provider of this valuable service, which is supposed to be decided this month. However, it shouldn’t impact the silver price itself, and in fact will probably be good for the industry. The process should be more transparent and efficient, and it will probably be electronic instead of by phone.
A potential glitch would be if there was a delay implementing the new program. The final fix in its current form is scheduled for August 14, and the industry will want to see a viable, state-of-the-art system in place well before that date. Some analysts think there will be a scramble to meet that deadline.
One factor in determining the likelihood of gold going this route could depend on the success of the new silver fix program. Gold has two “fixing” prices per day, so it would need to be equipped to handle twice the activity. But a more modern and automated system wouldn’t be a bad thing. It could also remove some of the doubt surrounding manipulation of the price.
Whatever the new system might be for silver, and whether or not gold goes a similar route, has no bearing on the reasons to invest in precious metals or our long-term bullish outlook. Gold and silver are money and a store of value, regardless of the process used to determine a daily benchmark price. So, no, we’re not worried about this.