Something Weird Could Happen to the Prices of Gold and Silver on April 1, 2015

dollar pyramidHere’s an interesting development…

Starting early next year, London will begin regulating gold and silver prices through newly created oversight groups. Their aim? To “drive up standards” and “identify manipulative behavior.”

Sounds good in theory, but one must wonder about the implementation and unwanted side effects of another regulatory group.

It’s not all that hard to imagine a scenario where there are “official” and “unofficial” prices of gold and silver. The “unofficial” prices would, of course, be higher than those published by the regulatory bodies.

Here’s the announcement as reported by Kitco:

Britain’s financial regulatory body is moving forward with its plans to regulate gold and silver benchmarks.

The Financial Conduct Authority announced Monday that starting April 1, 2015, it will regulate a total of seven additional UK-based financial benchmarks in the fixed income, commodity and currency markets.

According to the FCA, the London Gold Fixing and the London Bullion Market Association Silver Price, will be two of the seven new regulated benchmarks.

The other markets include the Sterling Overnight Index Average, Repurchase Overnight Index Average, WM/Reuters London 4 p.m. Closing Spot Rate — the dominant global foreign exchange benchmark, ISDAFIX — the principal global benchmark for swap rates and spreads for interest rate swap transactions and the Intercontinental Exchange Brent Index — the crude oil benchmark in Europe.

The inclusion of the new regulated benchmarks is the result of the FCA’s initial regulation of the London Interbank Offered Rate, which was established in 2013.

“I am determined to ensure that markets work well and preserve the UK’s reputation as a centre of excellence for financial services – today’s announcement is a vital step in achieving this. This builds on our work to strengthen LIBOR, and drive up standards on benchmarks across the board,” said Martin Wheatley, chief executive of the FCA in the press release.

Under the new rules each benchmark administrator and firms that contribute to the benchmark will be FCA-authorized, and each firm will have to designate a senior manager to oversee compliance of the new benchmark requirements.

The FCA said that it will be embarking on a consultation process to Jan. 30 as it finalized all the rules that will govern the new benchmarks.

However, in the press release, the regulatory body said “key requirements include identifying potentially manipulative behaviour, controlling conflicts of interest and implementing robust governance and oversight arrangements.”

Increased scrutiny of financial markets, especially gold and silver, was heightened during 2014 as claims of market manipulation and lawsuits continued to resurface. Research in both gold and silver fixes released earlier in the year highlighted anomalies of price suppression during the fixing process.

In August the LBMA replaced the London Silver Market Fixing Ltd with its new, electronic based, LBMA Silver Price Fix, which is administered by the CME Group and Thomson Reuters.

In 2015, the London Gold Fixing Ltd will be replaced with the LBMA Gold Price, which will be operated by ICE Benchmark Administration.

Next year the association will have all the intellectual property prices for the precious metals benchmark as it will launch a new fixing process for both platinum and palladium, which will be operated by the London Metals Exchange.

Jessica Fung, commodity analyst at BMO Nesbitt, said that the new benchmark regulations could end up hurting the gold and silver market and “may push more players out of the market even after lower commodity prices have already seen a number of firms exit the commodities business.”

  • CaptTurbo

    It seems to me that governments fear the metals because they are real money.

  • craig

    it can’t get lower will stop mining …it goes up from here ..flat lines..or bankrupts all associated

  • parlayer

    I’m holding out for the unofficial price. with gold under $1500 you got to pay sales tax if that’s your purchase.

    • ✡R. Grayson, Esq.✡

      Not if you buy online NOW–before the TaxTurds ram through an unconstitutional sales tax. If the seller is out of state, you usually don’t pay sales tax. If you buy from right vendor, you don’t pay shipping either.

      • parlayer

        Thanks for the info. although I’m broke, got what I got and that’s it.

    • tomas rader

      You actually gave a buyer/seller your real name, address, SSN, or actual cell phone number? That will generate a 1099 … which is fine if u want to pay taxes to a corrupt government, support the takers, institutionalize the MIC, etc. Why not get the crucibles, molds, a hi temp furnace, and change the weight denominations.? Get my drift yet? Gold and silver can be drilled and acid tested if you don’t trust the seller. I did this at a cash purchase with a big name dealer in los angeles … they didn’t even smile and thought it prudent. DONT do this with coins … just bullion bars and collect the filings … test tube test and then test the hole and observe with a jewelers eye. I also had my portable grain scale in hand for random weight testing.

      • parlayer

        eye? do you mean loup? and I’m not to sure about where the metal would come from if not from a dealer, or own your own mine?? to remain on the black market

    • Sabrina

      Oh, do some states have to pay a sales tax plus the dealer’s mark up?

      • parlayer

        cal. Law. purchases under $1500 subject to about a 9% sales tax which is included with his profit. you pay on the dealers profit as part of the total price. which if under $1500 is taxed. Over $1500 tax exempt.

        • Sabrina

          Weird. In Oregon you pay spot plus the dealer’s mark up (3-7%). We have no sales tax. you get ‘gold in hand’ then store it yourself. Best way. I don’t understand why over $1500 is tax exempt – is this a rule just for the Big Boys? Buying in larger quantities?

          • parlayer

            ??? Why is there a $10.00 1/4 OZ Coin? Like I have the answers, only go by them.(the rules), so you better read the book prior to any transactions.

          • rightsmite

            In Texas the limit is more than $1000 purchase or pay sales tax. Apparently the government believes that buying $1000 makes it a hobby while purchasing more than that amount makes it an investment and it is tax free.

  • Holy Joe

    Anything that a Government Tries to control – the perhaps unintended effect soon becomes Corruption. There is a lot to be said for truly free markets that are not warped by Sales and other Income or Trade Taxes, or allocation restrictions. We should be seeking greater and more realistic freedom in economics for all trading rather than yet more Government Interference and Distortion. The only regulation to silver and gold that any Government needs to make is standardization of Gold and Silver Bullion purities – free trade in real monetary value above all things. Soon paper money degenerates into waste or toilet paper as in pre-War 1923 Weimar Germany and China.

  • ✡R. Grayson, Esq.✡

    The benefit of these financial mental-midgets is artificially depressed prices, so the rest of us can afford to buy what we’ll need when their fiat-currency house burns down.

  • Carrie Barton

    This is my Gold guy he has been a blessing, helping me. I have made a lot of money these passed two years. Swiss America, Tom Schultz AZ 1 800 buy coin 289-2646

  • ..can anyone keep a secret or two ?

    ..which has to do with the rumor that the US Treasury department has found a method and a process of turning gravel into pure gold ingots like dross,

    ..and crushed sand into white gold to refine into 99% pure gold coins, laced with 1% platinum.

    ..soon to be produce in within the confines of New York State, in as much as we may need to import things like sand, should the local supplies run low, here a bouts.

    • … don’t ask, and don’t tell a soul, now !

      … because this could be a trade secret.

  • Most all of our theories are completely bogus by the way – founded in 1810 on quicksand, based on fatally flawed FALSE assumptions, plus quite a few bogus Newtonian extrapolations that were trashed with E=mc2 and their implications, in the minds of those working diligently on that old elusive Universal Field Theory and it’s extension – to boot…

    Not to mention a pack of NAZI propaganda lies and Filth regarding the disintegration of our nuclear families, or the resurgence of extended families, which are not inorganic molecules – are they ?

  • Metaphysics deals with organic life forms, not inorganic physics – like grains of sand in a glass hour glass, and it is about time, that WE THE PEOPLE wise up to those FACTS of the Matter…

  • Our LAWS are like an abomination and filth, they have no heart or soul, they have no mind to call their own – our Congress likes to engage in Sexual Congress or Carnal Knowledge it seems with wild abandon of things like ETHICS, MORALITY, SCRUPLES, HUMAN DECENCY.

    And those in Congress, would much rather engage in about 150 categories of Executable Class A Felonies, wanton acts of HIGH TREASON, international and domestic EXTORTION, human TRAFFICKING, Sadistic Cults involving little babies being Tortured to DEATH for entertainment value.

    While it seems our own FEDERAL GOVERNMENT likes to engage in :
    1) promoting FAMINE,
    2) wholesale chronic Unemployment,
    3) mass murder of Tens if not Hundreds of Million of innocent people for sport,
    4) where the innocent victims suffer horrible Deaths of unimaginable proportions,
    5) whist a few hundred thousand Sadistic FAT CATS, engorge themselves with Blood thirsty Acts or wanton Cannibalism, and
    6) hide behind this freedom of religion thingy in the name of a Satanic cult.