London Fix

The London Fix – officially known today as the LBMA Gold Price and LBMA Silver Price – is the most closely watched reference price in the physical precious metals market. It originated in 1919, when five London gold dealers met for the first time to set a uniform daily price for gold. Today it serves as a settlement basis for mining contracts, jewellery purchasing, central bank reserves and structured financial products around the globe.

How the fixing works

The modern process is fully electronic and is conducted by ICE Benchmark Administration (IBA) on behalf of the LBMA. Accredited banks and dealers participate in the gold fixing. Price discovery runs in iterative auction rounds:

1. IBA sets an opening price.
2. Participants anonymously report buy and sell volumes.
3. The price is adjusted until supply and demand match within a defined tolerance corridor.
4. Once equilibrium is reached, the price is published as the official fixing price.

The process is thus more transparent than the old telephone fixing, which was reformed in 2014 (silver) and 2015 (gold) – among other things following manipulation allegations that led to billion-dollar fines against several major banks.

Overview: fixing times and metals

Platinum and palladium are fixed through the LPPM (London Platinum and Palladium Market) but follow the same auction principle.

Difference between fixing and spot price

The spot price fluctuates by the second on the global OTC (over-the-counter) markets, while the London Fix is a single, daily-determined snapshot. Important differences:

• Spot price: continuous interbank price, tradable around the clock (except weekends).
• London Fix: a reference-date price used for contracts, arbitration clauses and accounting.
• Time offset: the PM Fix reflects the European afternoon market, by which time US dealers are already active – it is therefore considered particularly liquid and market-representative.

Practical significance

• Mining producers often sell their gold production at the PM fix.
• Jewellery and industrial companies calculate raw material costs on a fix basis.
• Central banks use fix prices for the valuation of their gold reserves.
• ETFs and ETCs and physically backed funds calculate the net asset value (NAV) on the basis of the PM fix.
• Arbitration clauses in long-term supply contracts refer explicitly to the LBMA Gold Price PM.

With the gold calculator you can value your own quantities on the basis of the current price; daily data for historical fix comparisons has been available for decades.

Reform history

1919  First telephone gold fixing (5 banks, NM Rothschild)
1968  Introduction of the two-tier system (official/market-based)
2014  Silver Fix discontinued → LBMA Silver Price (CME/Refinitiv)
2015  Gold fix → electronic IBA auction (LBMA Gold Price)
2014  Platinum/palladium → electronic LPPM fixing

In brief

The London Fix is not a negotiated price between individual dealers but the result of a regulated, anonymous auction with global reach. It remains the most important reference point for physical precious metal transactions worldwide – even though the second-by-second spot price dominates in daily trading.