Inside business

Banks have been fixing the price of gold for 100 years – and show no sign of stopping

No one would invent anything like it today but the secretive, historic process for valuing this treasured capital has overcome problem after problem, writes James Moore

Wednesday 11 September 2019 18:20 BST
Demand continues for the rather odd tradition of gold pricing
Demand continues for the rather odd tradition of gold pricing (AFP/Getty)

Happy 100th birthday to the gold price fix, an arcane but closely watched City tradition that used to be seen as quaintly charming until the activities of a Barclays trader made it clear just how appropriately named it was.

You won’t be surprised to learn that they’ve since changed that moniker. It’s now called the London Bullion Market Association (LBMA) Gold Price auction. The LBMA will tell you that that the change had nothing to do with the activities of trader Daniel Plunkett in the early part of this decade.

Plunkett was a director on the bank’s precious metals desk who, realising that his employer would have had to make a chunky payment to a client if the price was “fixed” above a certain level on 28 June 2012, placed a series of trades with the aim of preventing that outcome.

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