Gold BarsMost investors, particularly those in Europe, are still reeling from the LIBOR-rigging scandal that has, to-date, led to fines of almost $6 billion. Well, according to Germany’s top financial regulator, there is a new scandal coming that very well could be worse.

Elke Koenig, the president of Bafin (Germany’s top financial regulator), has recently made allegations that currencies and precious metals are also being illegally manipulated. Koenig says that the precious metals manipulations are “particularly serious, because such reference values are based – unlike LIBOR and Euribor – typically on transactions in liquid markets and not on estimates of the banks.” points out that the fact that currencies and precious metals are traded on the liquid market makes the allegations “more serious” because being on the liquid market means that the trust investors have had to have in the European central banks and their regulator (the Bank of International Settlements) may have been broken.

Koenig’s statements have upset both investors and banks. “That the issue is causing such a public reaction is understandable,” Koenig says in his speech. “The financial sector is dependent on the common trust that it is efficient and at the same time, honest. The central benchmark rates seemed to be beyond any doubt, and now there is the allegation they may have been manipulated.”

How this latest probe and allegations will affect the currency and precious metals markets remains to be seen. What does seem to be the case though is that investors are losing trust, and may soon become even more fearful of the standard investing marketplace.