The U.K. Financial Conduct Authority is reviewing gold benchmarks as part of its wider probe of how global rates are set, a person with knowledge of the matter said.
The FCA review is preliminary and hasn’t risen to the level of a formal investigation, said the person, who asked not to be identified because the matter isn’t public. The person declined to say which gold benchmarks were under scrutiny.
One of the key benchmarks is the London gold fixing, which determines the spot price for physical gold and is set twice daily by a panel of five banks.
Regulators around the world are examining alleged abuses of a number of financial benchmarks by companies that play a central role in setting them after it emerged the London interbank offered rate, or Libor, the benchmark interest rate for more than $360 trillion of securities worldwide, was being manipulated.
The scandal also sparked reviews of how to improve how rates are set to prevent them from being rigged in the future, and which ones should have formal oversight.
Lara Joseph, a spokeswoman for the FCA, declined to comment on the review.
In addition to Libor, regulators including the FCA are investigating rate-rigging in the $5.3 trillion-a-day foreign-exchange market, and ISDAfix, a benchmark for interest-rate swaps.
Separately, the FCA will publish an update on its approach to supervision of commodities markets, including gold, before the end of the year, Joseph said.
Commodities traders who buy and sell as much as $5.67 trillion of raw materials a year say the benchmark prices for everything from oil to iron ore to gasoline are wrong as often as 27 percent of the time, according to a Bloomberg survey completed this year.
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