Resource World Magazine

28 www.resourceworld.com A U G U S T / S E P T E M B E R 2 0 1 4 On June 18, the World Gold Council (WGC) announced it will convene a dis- cussion forum to explore reform of the London gold fix, with the first meeting to be held on July 7. "Our objective in con- vening this forum is to ensure that the full range of analysis and market perspectives from all parts of the gold supply chain are debated, understood and brought to bear on any potential changes," WGC managing director, central banks and public policy, Natalie Dempster, said. "Any reform or replacement of the fix must serve the needs of all market participants and meet today's requirements for transparency, liquidity and independent oversight." The FCA is also keen for participants to spur transformation. "Our starting point is that good price formation, clean price for- mation, is at the heart of market integrity … It's important that benchmark reform should be market led. It's not a thing that regulators should design and other people should do," Joseph said. "It's something that market participants need to take responsibility for: the designing and con- trolling of a benchmark that meets their needs and also works." Improvements might include an elec- tronic platform to replace the traditional teleconference methodology. "I traded on the fix for eight years when I worked for a hedge fund in London," Saxo Bank head of commodity strategy Ole Hansen told Resource World. "There's been an explosion in technology, screen trading and so on; it was just a question of time before it [the London gold fixing] was due a revamp." "I'm sure it'll be possible to create some kind of electronic solution where all par- ties will be happy and feel comfortable that a fair price is reached," he said. "[It might be] some kind of electronic auction system where there's better clarity." Hansen also noted that electronic plat- forms have additional oversight advantages. Dating back to 1919, the london gold fix is conducted by teleconference twice a day, starting at 10:30 am and 3 pm, UK time. Its current fixing members are Barclays, HsBC, société Générale and scotiabank. the process opens with the chairman declaring a start figure based on gold futures and spot prices. the four member banks then test demand and supply based on their customers' desire to buy and sell 400-ounce gold bars. the banks involved have the ability to call "flag", which brings proceedings to a temporary halt and allows the members to recalculate their overall interest. the price is eventually fixed if supply matches demand or the gap between buying and selling is less than 50 bars, in which case members will pro-rata the difference among themselves. the chairman then declares the fix to the market, which is used as a key gold benchmark for miners, commercial and central banks, jewellers and many other sectors. ENTREC is a leading provider of heavy lift and heavy haul services with offerings encompassing crane services, heavy haul transportation, engineering, logistics and support. We are committed to providing exceptional customer service with a focus on operational excellence, safety, and delivery of the most cost-effective solutions. With branches strategically located in western Canada and the northern U.S., ENTREC is well-positioned to meet the most challenging heavy haul and heavy lift needs. "$)&40/BONNYVILLE 780.826.4565 CALGARY 403.777.1644 CALGARY-BUSINESS DEVELOPMENT 587.955.9183 DAWSON CREEK 250.782.2728 DICKINSON, ND 701.364.3688 FORT MCMURRAY 780.790.0279 FORT NELSON 250.774.7638 FORT ST. JOHN 250.785.5750 GRANDE PRAIRIE 780.814.2189 LEDUC 780.980.0906 LLOYDMINSTER 780.808.9123 PRINCE RUPERT 250.624.6802 TERRACE/KITIMAT 250.635.6802 WATFORD, ND 701.483.8363 WHITECOURT 780.706.7111 www.entrec.com TSX:ENT 142801 Resource World ½ pg AD.indd 1 7/14/2014 2:06:30 PM

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