Though it may sound like something so far away from your daily life that it’s irrelevant, the London Gold Fix is important for anyone who’s looking into selling their unwanted gold. The international market price of gold is determined in London on a twice daily basis; 10:30 am, known as the morning fix and again at 15:00 pm, which is the afternoon fix.
It is the latter gold price fix which determines how much you’ll get for your unwanted jewelry on the given day. Now that we’ve got your attention, let’s take a closer look at the London Gold Fix, how it works and how it affects you as a gold seller.
Basics of the London Gold Fix (LBMA Gold Price)
The London Gold Fix, officially renamed the LBMA Gold Price in 2015, is considered the global benchmark for the value of gold – providing a fair rate for trade. In a type of auction run by bankers from 13 institutions called “market makers”, the price of gold is brought into equilibrium twice daily. The gold fix takes place at the times mentioned on the business days of the London Bullion Market Association (LBMA), and is set in US dollars.
Essentially what happens is that these market makers meet in a virtual conference, and try to get the quantity of gold in supply to meet the quantity of gold in demand, so that the precious metal is efficiently allocated.
The gold fix is opened by proposing a price near the current spot price, which fluctuates over the course of the day, and a trade at that price is then simulated by the bankers. They have gold orders (their own and on behalf of clients) that are typically limit orders, meaning they don’t buy unless the price goes below a preset amount, or sell unless it goes above a preset amount.
If equilibrium can be achieved at the proposed rate, the fix is complete and the price is made public. If not, the rate is adjusted and the process repeated. The entire process typically takes around 30 minutes to run its twice daily course.
History of the London Gold Fix
The first London Gold Fix was held on September 12th, 1919, to get London’s gold market going after the end of the First World War. With a few exceptions in subsequent wartime years, it has continued ever since, setting the “gold standard” for the value of the metal in trades worldwide.
Right up until 2004, the market-shaping bankers used to meet face-to-face to perform the Gold Fix. They have increased in number and diversified geographically over the years.
It pays to check before selling
To ensure you get the best possible rate for your gold, it’s advisable to keep an eye on the LBMA Gold Price. At Ross Simons we ensure that our customers get the best prices for their gold on any given day by making the latest LBMA prices available on our website. There’s no need to search for the best prices or get second opinions. We give you absolutely everything you need to ensure you get the best deal for your unwanted gold jewelry.
If you want to start selling your gold in a way that is swift, seamless and transparent, get your free Ross Simons Gold Kit now.