For close to a century, the price of gold has been set by The London Gold Fix. This is a pricing medium that has been generally used by gold traders all over the world. The problem with this system is that there are only four players fixing the daily price of gold. The global market will discontinue The London Gold Fix and will be using an electronic auction system instead. This will open up the international gold trading playing field to a wide variety of trading signals. This is tremendously big news for gold.
This can work either for or against gold. If the London Fix was artificially depressing the price of gold, gold traders would have a lot of reason to rejoice. Gold prices would spike up. On the other hand, if the Gold Fix was elevating the price of gold artificially, this could be bad news because the global price of gold might actually be lower than what we currently think. Regardless, this is a welcome development because the previous system has always been susceptible to all sorts of price manipulation allegations. Any system where only a few players dictate the price of a commodity or are in a position to influence the price of something is always a bad thing. Expect the global market place for gold to fundamentally change come this Friday.
