End of a golden era at Rothschild

THE small, wood-panelled room in the heart of the City where the price of gold has been 'fixed' for more than 80 years will become just another of the Square Mile's anonymous meeting rooms following NM Rothschild's withdrawal from the bullion market.

The merchant bank, which famously smuggled gold coins across the Channel to fund the defeat of Napoleon's army, says it does not make enough money from trading gold and wants to concentrate on its private banking arm.

Until Rothschild's successor as chairman of the fixing committee is appointed, the room will continue to be used for the twice-daily fix, which provides the market with a snapshot of the spot price of gold at a particular moment.

The committee comprises five London bullion houses - currently Rothschild, Deutsche Bank, Societe Generale, HSBC and Bank of Nova Scotia. Candidates to fill Rothschild's seat must be market-making members of the London Bullion Market Association and could include JP Morgan Chase, AIG, Goldman Sachs or Barclays.

Simon Weeks, Bank of Nova Scotia's representative and chairman of the LBMA, said members of the new committee would discuss who should take over the chairmanship.

Fixing the gold price by phone in future rather than meeting face-toface, at precisely 10.30am and 3pm Monday to Friday, has not been ruled out, Weeks said. 'Anything we do to change the process must be at least as good as we've got now and preferably better,' he said.