Gold has joined the list of global assets and indexes under review by the U.K. financial regulator, according to a media report.
The U.K. Financial Conduct Authority (FCA) has begun a preliminary look at the benchmark rate for the precious metal, according to a report by Bloomberg news agency, who quoted a source familiar with the situation. This forms part of a wider scrutiny by officials to find out how global benchmarks are set.
The source didn't disclose which gold benchmarks were part of the probe and, when contacted by CNBC, the FCA declined to comment.
One of the most important of the various gold benchmarks is the London Gold Fix. This occurs twice daily and consists of gold dealers from London's five biggest bullion banks -- Societe Generale, Barclays, Deutsche Bank, HSBC and Scotiabank -- creating a common price for a large amount of purchase and sale orders.
"Gold is one of the most liquid markets and the gold fixing prices set in London reflect actual trades at two set times of the day, rather than just a theoretical surveyed price as is the case in some interest rate markets, he told CNBC via an email.
"While there is potential manipulation in any market, I think the market depth and traded price setting means it is unlikely that gold prices are being manipulated. For physically backed ETPs (exchange-traded products), investors can see the current spot prices in real time and pricing is not dependent on the fixing prices, so there is complete transparency for the end gold investor."
Last month the FCA confirmed it was at the "early stage" of an inquiry into potential rigging of the $5.3 trillion (3.3 trillion) daily global trade in currencies, which is also under review the US Department of Justice and European authorities
