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To: Goose94 who wrote (11956)	3/4/2015 2:21:02 PM
From: Goose94	Read Replies (1) \| Respond to of 203419

Regulators Investigating Precious Metals Manipulation 'Encouraging' - Australian Researcher It is encouraging to see regulators around the world taking a more active interest in the potential manipulation of precious metals markets, said one Australian researcher.Andrew Caminschi, a researcher at the University of Western Australia, in Perth, said investigations in the U.S. and Switzerland regarding the precious metals price fixing will add more transparency in what has once been considered an opaque marketplace. Last week the Wall Street Journal reported, from unnamed sources, that the Department of Justice (DOJ), is investigating 10 major banks for the possibility of manipulating precious metals markets. On the same day, Reuters reported that Switzerland’s competition commission, WEKO, is also looking into the possible manipulation within the precious metals markets. “It’s still early days but it’s encouraging,” he said. “It is good that they are taking this seriously. They aren’t just leaving things the way they are.” Caminishi added that it is remarkable seeing how the dialogue regarding market manipulation has evolved over the years. At first the idea seemed “impossible”, then transitioned to “unlikely” and is now dismissed as “intra-day and a short-term anomaly.” “As the regulatory findings have put names and faces to these statistics that plank has been growing shorter and shorter,” he said. “What I can tell you, what we found in the silver research is consistent and for long periods of time. This is not an aberration we found in one or two sample years.” Not only are regulators taking more notice of the precious metals market but Caminschi said it is positive that the industry itself is actively taking steps improve the marketplace, replacing the archaic closed conference call with an electronic-based platform. All but the gold fix has been replaced by an electronic-based auction system and even the traditional gold fix will be replaced March 20. He added that these steps show the industry, and the market, are heading in the right direction. “The industry actually acted before the regulator because, if you look, none of these fixing are still around,” he said. “The industry quickly realized that they have to migrate and they moved to a more transparent platform, which is the direction we hinted at in our research.” As for how well the new electronic system is doing compared to its older counter-part, the jury is still out. Caminischi said that he is actively watching and collected data but couldn’t comment on potential results as the research is still ongoing. He explained that he is waiting to have a year of trading data to reduce market noise before he analyzes the numbers. “I am looking to have statically significant results. If you just look at one or two fixing it’s not clear what you will see,” he said. “You will never remove market noise but the sample size is important to us.” Research Shows Constant And Long-Term Market Aberrations Caminischi has been studying the precious metals market for several years, releasing his first report in September 2013 that looked at the impact on gold’s PM gold fix on two gold-backed exchange traded funds. According to his findings, “the London PM gold price fixing does have material impact on the exchange traded gold instruments, information from the fixing is leaking into markets prior to the fixing results being published and there exist economic returns for trading on these information leaks.” Following up on that research, in July 2014, Caminischi released paper on the silver fixing. After analyzing 14 years of trading data, his research showed the silver fix creates “statistically lower prices.” “This study finds a 10-12 (basis point) downward bias in the intraday price of silver around the time of the fixing. This represents three times the average daily return on silver over the same period,” Caminschi wrote in his paper as one of his five key findings. The investigations of the London fixing process has garnered significant media attention after HSBC, one of the banks under investigation, reported in its fourth quarter earnings report that the DOJ issued a document request in November, “seeking the voluntary production of certain documents”. HSBC also said in the report that they were issued a subpoena by the Commodity Futures Trading Commission (CFTC), ““seeking the production of certain documents related to HSBC Bank USA’s precious metals trading operations.” According to the Wall Street Journal, the 10 banks under investigation are: The Bank of Nova Scotia, Barclays PLC, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Société Générale SA, Standard Bank Group Ltd., UBS AG and HSBC.