Twice every trading day, the gold world pauses and looks at London. Here is what it is looking at.
Twice every trading day, the world’s gold market pauses and looks at London. What it sees is a five-minute electronic auction descended from a meeting in a Rothschild office more than a century ago.
The London gold fixing began on 12 September 1919 at the offices of N M Rothschild & Sons, where representatives of the great bullion houses gathered to agree a single reference price. For decades the ritual ran twice daily, complete with the famous small Union Jacks raised and lowered to signal participants’ interest, and the resulting number settled contracts across the planet.
Today the tradition survives as the LBMA Gold Price, set in transparent electronic auctions administered by ICE Benchmark Administration each London business day at 10:30 a.m. and 3:00 p.m. London time, with the LBMA Silver Price set at noon. Accredited participants enter buy and sell orders in successive rounds until volumes balance within tolerance, and the clearing price becomes the day’s benchmark. Same purpose as 1919, new machinery, full audit trail.
Refiners settling with miners, central banks valuing reserves, funds striking net asset values, and long-term supply contracts worldwide all reference the London prices, because commerce needs one number everyone can point to. The continuous spot market trades every second; the benchmark provides the twice-daily official snapshot the paperwork of the world is written against.
London’s 10:30 a.m. arrives in Boynton Beach at 5:30 in the morning, and the afternoon gold benchmark lands around 10:00 a.m. Eastern. When you watch our live charts with coffee in hand, you are often watching the market digest a London benchmark that printed while Florida slept, one more reminder that the metal in your cabinet belongs to a market that never really closes.