Little News from WGC on Purported Plan for London Exchange

Platts reported that the World Gold Council (WGC) has not commented definitively on reports that it has been speaking with a group of banks about setting up an exchange in London. The rumored move is reportedly an effort to boost market transparency.

A spokesperson from the WGC said:

We are constantly exploring potential market development initiatives. So, it is in the normal course of business that we are engaged in discussions with a number of individuals and organizations regarding the operation of the global gold market.

As the market development organization for the gold industry, our overriding aim is to encourage a transparent, efficient and liquid gold market.

The reaction from market watchers has been mixed:

‘It is not clear to me what role the organization could play in establishing a new London exchange, nor what benefits such an exchange might bring to either the process of price discovery or to members,’ the broker said.

A trader said that ‘on the surface, it seems to make sense’, while an analyst said the story seemed to be a rehash of a rumor first circulated last year. ‘There was an article resurfaced on this topic a week or so ago, but I think it was just the old article from last year,’ he said.

Click here to read the full Platts report.