UBS Announces Internal Investigation into Precious Metals Trading

The UBS annual report released Friday mentioned this as an outgrowth of their earlier begun FX investigation.  A couple of interesting points:

1) The mainstream reports over the last year have referred to alleged gold price fix manipulation.  Only 5 banks are involved in the benchmark rate setting process, and UBS is not one of them.  Goldbugs, on the other hand, have screamed market manipulation (by banks holding down the price of gold) for years.  While we are not gold market mavens, it appears difficult to believe that a long term strategy to hold down the market price of a commodity can be successful.  However, if any manipulation is found at all, we can expect many more conspiracy theories to see the light of day (and manipulation reports over the last few years will make them all a bit more believable).

2) Since the LIBOR scandal, UBS has developed a reputation of being the first bank to investigate allegations of wrongdoing and the first to approach regulators when anything untoward is found, trying to reduce or eliminate penalties.  Thus, this raises the question if once again, UBS is an early mover and additional precious metal trading investigations are to be begun.