Alert: - Deutsche Bank will withdraw from gold and silver benchmark setting, or fixing,
By Eric Onstad
Jan 17 (Reuters) - Deutsche Bank will withdraw from gold and silver benchmark setting, or fixing, amid an investigation by German regulators into suspected manipulation of precious metals prices by banks.
Deutsche, one of five banks involved in the twice-daily gold fix for global price setting, said it was dropping out of the process after withdrawing from the bulk of its commodities business.
"Deutsche Bank is withdrawing its participation in the gold and silver benchmark setting process following the significant scaling back of our commodities business," the bank said in a statement on Friday.
"We remain fully committed to our precious metals business."
In mid-December, German banking regulator Bafin demanded documents from Deutsche Bank as part of a probe into suspected manipulation of benchmark gold and silver prices by banks, the Financial Times reported, citing sources.
At the time, Deutsche declined to comment on the FT report.
Bafin in December reiterated that besides benchmark interest-rate rigging by banks, it had been looking at other benchmark-setting processes such as gold and silver price fixings at individual banks.
A source close to Deutsche said on Friday it was seeking to sell its gold and silver fixing seats to another member of the London Bullion Market Association.
Gold fixing happens by teleconference with four other banks: Bank of Nova Scotia-ScotiaMocatta, Barclays Bank Plc , HSBC Bank USA, NA and Société Générale, all of which declined immediate comment on the Deutsche move.
Pretty important development, largely over-looked by US-media. Don't know whether it's true or not, but there has been reference that this scandal is bigger than LIBOR!
That's one aspect that really irks/ire'sme as a participant, the rampant fraud. It's cuts across all classes of assets, and if the average person really knew how pervasive and insidious "foul-play in the Markets" really was, they'd probably put their $$$ in a shoe-box for better safety!
IMO, Gold's recent bid has more to do with this "price fixing" than anything else! China's buying big, and wanting to corner the market as much as possible, is my take. They realize that Gold represents the "de facto currency", and one of these days, with QE's effects become manifest, we too will realize golds import! I was never a "gold bug" before, nor am I now, but I just can't come-up with a better asset to have, when "real consequences" start to play-out in the Markets....