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CME Group Among Those In Talks With LBMA On Alternative To Silver Fixing

By Kitco News
Thursday May 29, 2014 12:57 PM

(Kitco News) - CME Group confirmed Thursday that the U.S. exchange operator is in talks with the London Bullion Market Association on trying to help develop a possible alternative to the London silver fixing.

The London Silver Market Fixing Limited said earlier this month that it will stop administering the London silver fixing after Aug. 14. The LBMA quickly stepped up in looking for feedback for an alternative and launched an online market survey last week. Ahead of the long U.S. Memorial Day weekend, the LBMA said it had already received over 250 responses.

In response to media inquiries, CME Group issued the following statement:

“CME Group’s Comex offers the most liquid, transparent marketplace for trading benchmark gold and silver derivatives contracts. Customers in London – and around the world – have used our listed, electronically traded and centrally cleared gold and silver contracts for price discovery and risk management for over 50 years.

“While the London market is looking at a new way to set the daily spot price of silver, we are working closely with the precious metals industry and the LBMA to reduce market disruption by helping to find a robust transaction-based way to set the daily spot price so the markets can continue to work efficiently and seamlessly.”

Those who want to take part in the LBMA market-consultation process can click here to access the online survey.

Although the CME and the LBMA are working on a replacement for the London silver fix, the world’s largest gold site, Kitco Metals Inc. is now publishing a daily New York silver fixing at 10 a.m. EDT on its website Kitco.com.

Kitco’s fix is determined by a unique algorithm that calculates the average spot price between bid/offer on the wholesale silver market, as quoted by internationally recognized bullion dealers.

For both gold and silver, representatives of several banks hold conference calls to match buy and sell orders and decide on a London fixing, which is a single reference price for miners, consumers, investors and others in the gold industry. The period from now until the end of the silver fixing in August is intended to provide market participants an opportunity to explore possible alternatives, according to the company that operates the fix.

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By Allen Sykora of Kitco News; asykora@kitco.com



Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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