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Thomson Reuters loses bid to run London gold fix

Thomson Reuters has lost its bid to run the London daily price fix for the $5 trillion-a-year gold bullion market in partnership with the Chicago Mercantile Exchange.

US bourse Intercontinental Exchange (ICE) was named as provider of an electronic benchmark gold price to replace the twice-daily fix from the first quarter of 2015. The fix - a price-setting mechanism by a handful of banks - has governed bullion trade since 1919.

Reform of the mechanism was triggered by a regulatory push for more transparency through a move to electronic solutions that display selling and buying order volumes. 

Thomson Reuters in partnership with the Chicago Mercantile Exchange was named as the new operator of an auction-based silver price in August. The London Metal Exchange will run the platinum and palladium fixes from December.

"Many thought it was a two horse race between CME and LME. On the day, the outsider, ICE, won by putting in a good shift," broker Sharps Pixley CEO Ross Norman said.

Market participants said that although the benchmarks will initially be administered by different bodies, ultimately they could be consolidated into one platform, depending on their success, which would be measured by liquidity and interest. ■

SOURCE
Reuters