For a long time, London has been the world's largest spot silver pricing center, and the LBMA is also the most influential institution in the global gold and silver market. The settlement of transactions between manufacturers, consumers and financial institutions is also the pricing benchmark for many silver derivative contracts.
But since August 2012, the pricing mechanism of silver has entered a new stage, and the entire pricing system, led by Chicago Mercantile Exchange and Thomson Reuters, has entered a new era. The new pricing system provides an auditable electronic benchmark based on the auction model, so that the pricing of silver can be very close to the market, reflecting the market's sensitivity to prices, and to a certain extent, reducing the current possibility of price manipulation sex.
According to the design of the new silver pricing plate, it is an electronic price bidding platform provided by the Chicago Mercantile Exchange. Thomson Reuters is responsible for the management, governance and release of the benchmark price, while LBMA is responsible for authorizing participants. Compared with the previous London silver pricing mechanism, which has been in use for more than 100 years, this increases the transparency of the price setting mechanism, allowing banking trading companies, silver refiners and producers to participate widely.
However, no pricing mechanism is perfect. In the new silver pricing mechanism, the list of market participants as important information has not been fully announced, and some silver traders also feel that the new system is not convenient to use. In addition, the price setting in the new electronic plate is not transparent and can be separated from the supervision. Therefore, there are voices of doubt in the market whether the new silver pricing plate can truthfully reflect the market situation.