LBMA Fixing
Also: London Fix, London Fixing Price, LBMA Gold Price, LBMA Silver Price
The LBMA Fixing is a reference price for gold and silver determined twice daily in London and used worldwide as a binding benchmark for trading transactions, mining contracts and financial products.
The LBMA Fixing – officially known today as the LBMA Gold Price and LBMA Silver Price – is the world's most important reference price for physical gold and silver. It is determined daily in London through a regulated electronic auction process and serves mining corporations, central banks, jewellery manufacturers, refineries and financial institutions as a binding price basis for millions of contracts.
Historical Development
The London gold fixing has a history of almost a hundred years:
| Year | Event |
|---|---|
| 1919 | First daily gold fixing in London (N M Rothschild & Sons, plus 4 other banks) |
| 1968 | Second daily fixing introduced (PM fix); two-tier market after gold pool collapse |
| 1987 | Founding of the London Bullion Market Association (LBMA) |
| 2004 | Rothschild withdraws; Barclays Capital takes the seat, physical meetings end – fixing subsequently runs as a telephone conference, chair rotates annually |
| 2014 | Manipulation allegations lead to regulatory reforms |
| 2015 | ICE Benchmark Administration (IBA) takes over administration; new electronic auction model |
The silver fixing existed in its original form from 1897 to 2014 and has run since August 2014 as the electronic LBMA Silver Price. Administration was initially taken over by the CME Group together with Thomson Reuters; since 2 October 2017 the LBMA Silver Price – like the gold price – has been administered by the ICE Benchmark Administration (IBA).
How does the auction process work?
Since the 2015 reform, the gold fixing runs as a fully automated electronic auction following a clearly defined algorithm:
Starting price = current OTC spot price (reference value)
Round n:
Bids and offers from participants are aggregated
If |demand - supply| ≤ tolerance → fixing price set
Otherwise: price is adjusted → next round
The auction begins with a starting price close to the current spot price and iterates within a few minutes until supply and demand are balanced within a defined tolerance corridor. Participants are exclusively LBMA-accredited market participants (Direct Participants) who bid on their own behalf or for clients.
Daily fixing times (London local time):
- Gold AM Fix: 10:30
- Gold PM Fix: 15:00
- Silver Fix: 12:00
Distinction: fixing price vs. spot price
A common misconception: the fixing price is not identical to the current spot price, even though the two are closely related.
| Feature | Spot Price | LBMA Fixing |
|---|---|---|
| Determination | Continuous, OTC interbank trading | 2× daily via auction |
| Purpose | Short-term trading, hedging | Contract reference, settlements |
| Binding nature | Indicative | Official benchmark |
| Transparency | Varies by provider | Fully published |
| Regulation | Low | FCA-regulated (UK) |
For short-term purchasing decisions the current spot price is more relevant; for long-term supply contracts or mine offtakes the fixing price is typically referenced.
Significance and use
The LBMA fixing price is applied in a wide range of contexts:
- Mining contracts: Gold producers often sell their output at "PM fix minus X USD/oz".
- Jewellery and industrial offtakes: Refineries and jewellery manufacturers settle on a fixing basis.
- Central banks: Valuation of gold reserves and transactions between central banks.
- ETFs and ETCs: Many gold funds (e.g. physically backed gold ETFs) value their shares daily at the LBMA PM fix.
- Derivatives and structured products: Options and futures contracts on the OTC market reference the fixing price as the settlement rate.
- Tax valuation: In some jurisdictions the fixing price is used as a valuation basis for inheritance or gift tax (not tax or investment advice; please consult a tax advisor).
The historical fixing prices are publicly accessible and form one of the most extensive price time series in the commodities market – gold reaching back to 1968.
Regulation and integrity
Following the Libor scandal and suspicions of market manipulation in the gold market (2014), the fixing process was fundamentally reformed:
- FCA supervision: As a benchmark administrator, IBA is subject to the UK Financial Conduct Authority.
- Full traceability: All auction rounds are logged.
- Expanded participant base: More accredited banks and trading firms can participate.
- BMR compliance: The process meets the requirements of the EU Benchmark Regulation (BMR).
Platinum metals: no LBMA fixing
Important to know: for platinum and palladium there is no classic gold or silver fixing by IBA. For these metals the LBMA Platinum and Palladium Prices are determined – twice daily via electronic auction, administered by the London Metal Exchange (LME), which took over this process at the end of 2014 from the former London Platinum and Palladium Fixing.
In brief
The LBMA fixing is the heart of the London gold market: a regulated electronic auction process that delivers two binding reference prices for gold and one for silver daily – used by central banks, mines, refineries and financial products around the globe. Anyone buying or selling physical precious metal effectively always trades in the shadow of this benchmark.