London silver price fixing under fire: Two important partners retract

In recent years it has been regarded as a successful model, but apparently there have been huge clashes behind the scenes: CME Group and Thomson Reuters are withdrawing from the silver price-fixing, i.e. the determination of a daily silver reference price. Due to this surprising development, the London Bullion Market Association is under pressure.

London has always been regarded as the center of the worldwide precious metals trading; after all, the reference exchange rates of gold and silver were determined here every trading day. This value is considered a benchmark for many bullion dealers. Since August 2014, the fixing has taken place internet based to address persistent criticism of the supposedly tamper-prone process. The price should be covered by real trading volumes and not by rule-of-thumb decisions henceforth.

But now the financial services provider Thomson Reuters and the Chicago Mercantile Exchange (CME Group), according to a report by the Reuters news agency, seem to have enough of the silver price-fixing. Reasons were not disclosed, but substitutes were not revealed. The two companies enforcedly continue their commitment until a successor has been found.

Despite the modernization of silver pricing, the project did not get out of the negative headlines in recent years. Several times the reference price diverged considerably from the rates on the spot market. A statement was not given for any of those critical incidents.

About the author

Sebastian Wieschowski