CME, Thomson Reuters Win Right to Create New London Silver ‘Fix’ Benchmark

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CME Group and Thomson Reuters will operate the London silver fix when the current 117-year-old process is disbanded in August, in a move widely seen preceding broad reforms of precious metals benchmarking.

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The London Bullion Market Association (LBMA) said in a statement on Friday that CME Group will provide a price platform and methodology, while Thomson Reuters will be responsible for administration and governance.

CME/Thomson Reuters will start testing the new process in early August, the LBMA said in the statement. Reuters reported that the new price mechanism is electronic, auction-based and auditable. It is also tradeable with an increased number of direct participants, the LBMA said.

The silver fix is set every day at noon by three banks via a conference call, working out a price at which their customers are willing to buy and sell the metal.

But with increased attention from regulators in the wake of benchmark manipulation in other markets, the current operator of the benchmark, London Silver Market Fixing Ltd., said in May it would stop running the daily call.

After two changeless days, the price of Chinese gold bullion closed at CNY 264.70 ($42.69) per gram on Thursday, July 10. US gold bullion prices rose 0.5 percent to $1,327 per ounce. The price of Japanese gold bullion moved up 0.4 percent, landing at JPY 4,327 ($42.61) per gram. The price of Indian gold bullion increased 0.3 percent to INR 27,771 ($464.72) per 10 grams.

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Chinese silver saw its price rise 0.7 percent to CNY 4,340 ($700.01) per kilogram. The price of US silver increased 0.4 percent to $21.09 per ounce. Indian silver ended the day at INR 45,820 ($766.75) per kilogram, after the 0.1 percent drop on Thursday. At JPY 687.00 ($6.77) per 10 grams, the price of Japanese silver was essentially unchanged.

Chinese platinum bar saw its price rise 0.6 percent to CNY 319.00 ($51.45) per gram. US platinum bar prices rose 0.6 percent to $1,500 per ounce. Japanese platinum bar gained 0.3 percent to finish at JPY 4,905 ($48.30) per gram.

The price of Japanese palladium bar rose by 0.3 percent to JPY 2,870 ($28.26) yesterday after remaining flat for two days. US palladium bar prices inched up 0.1 percent to $870.00 per ounce. Following a two-day rise, the price of Chinese palladium bar flattened at CNY 195.00 ($31.45).

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