Manipulation in the COMEX and LBMA

I don’t really think you need a fix, quite frankly. Most of these markets are 24-hour markets. I mean somebody might argue that you need it for pricing at a specific time for some contracts that are out there, but I suppose one could just say, “Well here’s where silver was trading, let’s say 10:00 a.m. London time this day, and make that the price for contracts to settle.”

But, there seems to be no doubt that the LBMA fix was fixed, and of course we’ve seen examples of manipulation where Barclay’s was fined, I think it was 40-odd million dollars, for manipulating the price back in 2013. As I’ve said before, you see these weird trades on COMEX when options expire. I mean it’s a game that the boys with the money can play and move things around.

I wish they would’ve disbanded the fix, well, they have disbanded the fix, particularly when it manifested itself, because they had five traders sitting on the phone for five minutes deciding where things would go, and of course, in the meantime, they are placing orders to make their books look more attractive to them and/or participating in the market before the fix was made.

So there’s no doubt that it’s outdated. It shouldn’t be used and will not be used, but the fact that we’ve got the CME back in there is somewhat distressing to most of us precious metals holders who want to deal on the physical market.

- Eric Sprott via Ask the Expert