Market Watchers Question Transparency of New LBMA Silver Price

This morning, the London Bullion Market Association (LBMA), CME Group Inc. (NASDAQ:CME) and Thomson Reuters Corp. (NYSE:TRI) launched the LBMA Silver Price, and many are wondering what the news means for silver prices.

Addressing that question in an article published yesterday, Jim Bach of Money Morning explains that the hope is that the new system will lead to increased transparency. However, some doubt that will actually be the case.

He states:

The initial members within the new pricing procedure are expected to be the 11 market-making members of the London Bullion Market Association, which include names like Goldman Sachs Group Inc. (NYSE:GS), JPMorgan Chase & Co. (NYSE: JPM), and UBS, the Financial Times reported.

With similar names reentering the new silver pricing game, Money Morning’s [Resource Specialist Peter] Krauth is slightly discouraged, believing that at least initially, the new fix won’t allow for proper price discovery.

‘It’s the same gang that a lot of observers did feel are not necessarily doing this in the most transparent and free-market-price-discovery-oriented kind of way,’ Krauth said.

Click here to read the full Money Morning report.