Fixing vs. Spot
Also: LBMA Fixing, London Fix, Spot rate
The spot price is the continuously traded market price for immediate delivery, while the fixing is a reference price determined only once per day.
The gold price and the prices of the other precious metals confront buyers and sellers in two different forms: as a spot price and as a fixing. Both describe the same commodity - yet the methodology, timing and purpose differ fundamentally.
Spot price - the market price in real time
The spot price (also spot rate) is the current trading price for physical precious metal or the corresponding contract with (near-)immediate settlement - usually within two banking days (T+2). It is traded around the clock at the major trading venues such as COMEX (New York), the LBMA (London) and Asian exchanges, and changes second by second according to supply, demand and currency movements.
Spot prices are the basis for almost all dealer prices: bar and coin dealers add their premium (agio) to the spot price and thus calculate their selling price.
Fixing - the official daily reference price
The LBMA Gold fixing (officially: LBMA Gold Price) is determined twice daily - at 10:30 and 15:00 London time - through an electronic auction process under the supervision of ICE Benchmark Administration (IBA). It delivers a single, up-to-date daily reference price in USD per troy ounce.
| Feature | Spot price | Fixing |
|---|---|---|
| Frequency | continuous (24/5) | 2x daily (AM / PM) |
| Determination | exchange trading (bid/ask) | electronic auction (IBA) |
| Purpose | trading, hedging | contracts, accounting, mine sales |
| Currency | mostly USD/oz, also EUR | USD/oz (official publication) |
Mines, central banks, refineries and institutional buyers use the fixing as a binding settlement basis in long-term supply contracts. Many gold savings plans also settle at the fixing price.
Practical relevance for private investors
For the purchase of gold bars or bullion coins, the spot price is the more relevant value: it determines the entry price in real time. The fixing has more of a historical significance - as a figure fixed once daily, it is well suited for historical price comparisons and portfolio valuations.
The difference between the AM fixing and the current spot can - depending on the time of day and market situation - amount to several dollars per ounce. The spot price responds immediately to exchange rate fluctuations, the fixing only at the next auction time.
In brief
Spot is the living market price from second to second; the fixing is its once-daily frozen image - indispensable for contracts and balance sheets, but too sluggish for active trading.