London's gold benchmark experienced large, unpredictable fluctuations after some banks left the auction that sets the price relied upon by the $5 trillion-a-year bullion market, according to a Reuters analysis of trading data.
The benchmark is meant to be a fair and accurate daily snapshot of the fast-moving "spot" market and is used by gold producers and consumers around the world to price contracts.
Its level is set by the London Bullion Market Association (LBMA) Gold Price auction, which sees big banks and brokers electronically input their trading orders, with an algorithm matching buyers to sellers and setting the price.
But trading volumes fell sharply after April 10, when four of the 14 participating banks and brokers stopped taking part after the auction's administrator, Intercontinental Exchange (ICE), introduced a requirement to clear that meant participants had to modify their own IT systems and procedures. ...
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http://www.reuters.com/article/us-gold-benchm...SKBN18K2H6?il=0
