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How do they Fix the Gold Price?
The Gold Fixing (also known as the London Gold Fixing
or Gold Fix) is the procedure by which the price of gold is set on
the London market by the five members of the London Gold Pool.
It is
designed to fix a price for settling contracts between members of
the London bullion market, but informally the Gold Fixing provides a
recognised rate that is used as a benchmark for pricing the majority
of gold products and derivatives throughout the world's markets. The
Gold Fixing is conducted twice a day by telephone, at 10:30 GMT and
15:00 GMT.
Learn more:
How to Invest in Gold
The first fixing took place on 12 September 1919 amongst the five
principal gold bullion traders and refiners of the day: N M
Rothschild & Sons, Mocatta & Goldsmid, Pixley & Abell, Samuel
Montagu & Co. and Sharps Wilkins. The gold price then was four
pounds 18 shillings and nine pence (GBP 4.9375) per troy ounce.
 Due to wartime emergencies and government controls,
the London Gold
Fixing was suspended between 1939 and 1954.
Gold prices are fixed in United States dollars (USD), Pound sterling
(GBP) and Euros (EUR).
On 21 January 1980 the Gold Fixing reached the price of $850, a
figure not overtaken until 3 January 2008 when a new record of
$865.35 per troy ounce was set in the a.m. Fixing. However, when
indexed for inflation, the 1980 high would equate to a price of
$2398.21 in 2007 dollars, thus the 1980 record still holds in real
terms.
What is
Today's Gold & Silver Prices
The Fixing historically took place twice daily at the City offices
of N M Rothschild & Sons in St Swithin's Lane, but since 5 May 2004
it takes place by telephone. In April 2004 N M Rothschild & Sons
announced that it planned to withdraw from gold trading and from the
London Gold Fixing. Barclays Bank took its place from 7 June 2004,
and the chairmanship of the meeting, formerly held permanently by
Rothschilds, now rotates annually.
A tradition of the London Gold Fixing was that participants could
raise a small Union Flag on their desk to pause proceedings. Under
the telephone fixing system, participants can register a pause by
saying the word "flag", and the chair ends the meeting with the
phrase "There are no flags, and we're fixed".
The current five participants in the Fixing, who must be members of
the London Bullion Market Association, are:
Scotia-Mocatta — successor to Mocatta & Goldsmid and part of Bank of
Nova Scotia
Barclays Capital — Replaced N M Rothschild & Sons when they
abdicated
Deutsche Bank — Owner of Sharps Pixley, itself the merger of Sharps
Wilkins with Pixley & Abell
HSBC — Owner of Samuel Montagu & Co.
Société Générale — Replaced Johnson Matthey and CSFB as fifth seat.
What was the Price of Gold in the Past?
To learn more, go to:
Historic Gold Prices
PLEASE SEEK
PROFESSIONAL ADVICE BEFORE YOU BUY OR SELL GOLD, SILVER & COINS.
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