The Swiss competition commission said on Monday that it was probing seven banks UBS, HSBC, Deutsche Bank, Julius Baer, Barclays, Morgan Stanley and Mitsui, over allegations of possible price fixing in the precious metals market.
It has been alleged that the banks had entered into a secret agreement amongst themselves to coordinate the prices, namely the spreads, said the Swiss competition commission.
Spread is referred to as the difference between the bid and offer price - of gold, silver, platinum and palladium.
Fines of up 10% of revenues of the banks could be levied for those banks that would be found guilty to have violated Switzerland’s competition laws after the investigation, which is expected to be completed in 2016 or 2017, was over.
Since December 2013, when German banking regulator Bafin demanded documents from Deutsche Bank under an inquiry into suspected manipulation of gold and silver benchmarks by banks, the global precious metals trading has been under regulatory scrutiny.
Accusations of manipulation of prices have refused to go away even as the markets have moved to reform the process of deciding on its price benchmarks.
Investors across the globe are said to be losing faith in gold as a status for investment as he precious metal has lost some 9 percent of its value in the last two years.
Switzerland's competition commission WEKO said in a statement: "It (WEKO) has indications that possible prohibited competitive agreements in the trading of precious metals were agreed among the banks mentioned."
More banks could be added to the investigations if reasons for suspicion were found during the investigations, said a WEKO spokesman.
The Swiss announcement of investigation comes barely a month after European Union's competition regulator announced investigation in to alleged anticompetitive behaviour in precious metals spot trading and the probe announcements by the U.S. Department of Justice (DoJ) and the Commodity Futures Trading Commission earlier this year.
According to reports, at least two major global banks are within the gambit of the US investigation that is looking at possible rigging of precious metals markets. Earlier in the year HSBC and Barclays had said that they were extending complete cooperating with the investigation.
The LIBOR scandal in foreign exchange markets has racked up the scrutiny of precious metals pricing. Sic banks were fined nearly $6 billion in settlements after four of the banks owned up to the allegations and pleaded guilty of trying to manipulate forex rates earlier in May this year. the forex market in precious metals is worth $5 trillion-a-day.
Last year banks had adopted a physically settled electronic system for benchmark prices instead of the existing systems that were set twice a day via a telephone auction in order to achieve a more transparent process in the precious metals dealing.
Miners, refiners, traders and end-users use the benchmark to set prices for gold and silver, as well as platinum and palladium.
(Sources:www.digitallook.com & www.reuters.com)
It has been alleged that the banks had entered into a secret agreement amongst themselves to coordinate the prices, namely the spreads, said the Swiss competition commission.
Spread is referred to as the difference between the bid and offer price - of gold, silver, platinum and palladium.
Fines of up 10% of revenues of the banks could be levied for those banks that would be found guilty to have violated Switzerland’s competition laws after the investigation, which is expected to be completed in 2016 or 2017, was over.
Since December 2013, when German banking regulator Bafin demanded documents from Deutsche Bank under an inquiry into suspected manipulation of gold and silver benchmarks by banks, the global precious metals trading has been under regulatory scrutiny.
Accusations of manipulation of prices have refused to go away even as the markets have moved to reform the process of deciding on its price benchmarks.
Investors across the globe are said to be losing faith in gold as a status for investment as he precious metal has lost some 9 percent of its value in the last two years.
Switzerland's competition commission WEKO said in a statement: "It (WEKO) has indications that possible prohibited competitive agreements in the trading of precious metals were agreed among the banks mentioned."
More banks could be added to the investigations if reasons for suspicion were found during the investigations, said a WEKO spokesman.
The Swiss announcement of investigation comes barely a month after European Union's competition regulator announced investigation in to alleged anticompetitive behaviour in precious metals spot trading and the probe announcements by the U.S. Department of Justice (DoJ) and the Commodity Futures Trading Commission earlier this year.
According to reports, at least two major global banks are within the gambit of the US investigation that is looking at possible rigging of precious metals markets. Earlier in the year HSBC and Barclays had said that they were extending complete cooperating with the investigation.
The LIBOR scandal in foreign exchange markets has racked up the scrutiny of precious metals pricing. Sic banks were fined nearly $6 billion in settlements after four of the banks owned up to the allegations and pleaded guilty of trying to manipulate forex rates earlier in May this year. the forex market in precious metals is worth $5 trillion-a-day.
Last year banks had adopted a physically settled electronic system for benchmark prices instead of the existing systems that were set twice a day via a telephone auction in order to achieve a more transparent process in the precious metals dealing.
Miners, refiners, traders and end-users use the benchmark to set prices for gold and silver, as well as platinum and palladium.
(Sources:www.digitallook.com & www.reuters.com)
