London Bullion Fixing: LBMA Gold and Silver Price

Key Takeaways

• The LBMA gold silver fix sets gold prices at 10:30 and 15:00 London time, and silver at 12:00 London time.
• The auctions are electronic, in US dollars, and run in 30-second rounds until supply and demand balance.
• ICE Benchmark Administration runs the auctions, while the LBMA owns the intellectual property.
• The fix is a spot benchmark, distinct from the exchange-traded futures prices on COMEX.

What It Is

The London bullion fixing, now known as the LBMA gold and silver prices, is a daily auction that produces a single reference price for each metal. Gold is set twice a day and silver once. The prices are quoted in US dollars per troy ounce, though participants can settle in other currencies.

The benchmark is administered independently by ICE Benchmark Administration, or IBA, which provides the electronic auction platform. The LBMA, the trade body for the London bullion market, owns the rights to the benchmark and oversees its governance.

The Intuition

A market needs a trusted reference price that everyone can point to. Refiners, central banks, mining companies, and funds all want to transact or value holdings at a price that is fair, transparent, and hard to manipulate. A single auction at a set time gives them that anchor.

By concentrating buying and selling interest into a brief window, the auction discovers a price where supply and demand roughly match. That published number then becomes the settlement reference for countless contracts that specify the LBMA price rather than trying to pin down a constantly moving market quote.

How the LBMA Gold Silver Fix Works

The auction is electronic, tradeable, and physically settled. Each session runs in rounds:

Gold auctions:   10:30 and 15:00 London time
Silver auction:  12:00 London time
Currency:        US dollars per troy ounce
Round length:    30 seconds
Balance rule:    auction ends when imbalance is within tolerance

At the start of each round, IBA publishes a price. Participants then have 30 seconds to enter, change, or cancel orders stating how much metal they want to buy or sell at that price. If buying and selling do not balance, the price moves and a new round begins. The auction ends when the net imbalance across all participants falls within a set tolerance, reported as 10,000 ounces for gold. Any remaining small imbalance is shared equally among the direct participants, and all matched volume trades at the final price.

Worked Example

Imagine a morning gold auction. IBA opens round one at 2,050.00 dollars per ounce. Buyers want far more metal than sellers offer, so the imbalance is large. The price is raised for round two to 2,053.00, which pulls in more sellers and cools some buyers.

The imbalance shrinks but is still outside tolerance, so round three opens at 2,052.00. Now buy and sell volumes are within the 10,000-ounce tolerance. The auction closes, and 2,052.00 becomes the published LBMA Gold Price for that morning. A refiner that agreed to sell metal at the morning fix now settles at 2,052.00 per ounce, regardless of where the spot market trades a minute later. The auction has done its job, producing one transparent reference for all who use it.

Common Mistakes

1. Confusing the fix with the futures price. The LBMA price is a spot benchmark set in an auction. COMEX gold is a futures contract with margin and delivery dates. They track each other but are not the same number.
2. Assuming it updates continuously. The fix is set only at scheduled times. Between auctions, the live market price moves, but the benchmark does not change.
3. Thinking it is set by one bank. The price comes from a multi-participant electronic auction overseen by IBA, not a single dealer setting the level.
4. Ignoring which fix a contract uses. A contract may reference the morning or afternoon gold fix specifically. Using the wrong one creates settlement disputes.
5. Overlooking the currency. The benchmark is set in US dollars. Buyers settling in other currencies take on exchange rate effects on top of the metal price.

Frequently Asked Questions

What is the LBMA gold silver fix in simple terms? The LBMA gold silver fix is a daily London auction that sets a benchmark price for gold and silver. Gold is fixed twice a day and silver once, in US dollars per ounce.

How does the LBMA gold silver fix affect investment decisions? Many contracts, funds, and physical deals settle at the fix, so it determines the price buyers and sellers actually receive. Investors use it as a transparent, audited reference rather than a fast-moving market quote.

What is a real-world example of the LBMA gold silver fix? In a morning gold auction, the price might move from 2,050 to 2,052 dollars over a few 30-second rounds until buying and selling balance, and 2,052 becomes the published benchmark.

How can investors use the LBMA gold silver fix effectively? Check which fix a contract references, the morning or afternoon gold price, and remember it is a spot benchmark in dollars. Use it to value holdings consistently rather than chasing intraday ticks.

How is the LBMA gold silver fix different from COMEX gold futures? The fix is a twice-daily spot benchmark set by auction. COMEX gold is a continuously traded futures contract with margin and a delivery process, so its price includes the cost of carry to a future date.

Sources

1. LBMA. LBMA Gold Price FAQs. https://www.lbma.org.uk/prices-and-data/lbma-gold-price/lbma-gold-price
2. LBMA. About LBMA Daily Auction Prices. https://www.lbma.org.uk/prices-and-data/about-lbma-daily-auction-prices
3. ICE Benchmark Administration. LBMA Gold and Silver Price. https://www.ice.com/iba/lbma-gold-silver-price
4. LBMA. Precious Metal Benchmarks. https://www.lbma.org.uk/publications/the-otc-guide/precious-metal-benchmarks

Disclaimer

This article is educational content only and is not financial advice. Nothing here is a recommendation to buy, sell, or hold any security. Consult a licensed advisor before making investment decisions.