‘Gold Fix Price’ is what the industry calls the LBMA Gold Price. In the past, the London Bullion Market Association determined the gold price at 10:30 am when the London market opened and again at 3 pm to align with the start of US trading. In 2015, ICE Benchmark Administration (IBA) took charge of setting this price for gold, and in 2017, they also began setting the price for silver.
IBA’s electronic platform has been widely accepted by markets because it addressed worries about market manipulation that were emerging before IBA took over.
The new process works like an online auction. Initially, the system suggests a price based on current market conditions. Sixteen major financial firms and banks then test this price to see if they can meet their buying and selling needs at that rate. After each round, the system checks if the difference between buying and selling (known as the “imbalance”) is within acceptable limits—normally 10,000 ounces for gold and 500,000 ounces for silver.
If the imbalance exceeds these limits at the end of a round, the system proposes a new price, and another round begins.
If the imbalance falls within the threshold, the process is deemed successful, and the price is fixed.
The “Platinum Fix Price” and “Palladium Fix Price” are the prices of platinum and palladium respectively, which are managed independently by the London Metal Exchange (LME). These prices are determined twice daily during market hours, at 09:45 and 14:00 (London BST). BASF Metals Ltd, Goldman Sachs International, HSBC Bank USA NA, Johnson Matthey plc, and Standard Bank plc participate in setting these prices.
Dubai, being a major regional hub for gold, places great importance on maintaining trust in the gold market. To achieve this, the government has implemented a system where there is a maximum rate that jewelers and dealers can charge based on the gold content in retail sales. This rate includes a slight margin to cover costs such as bullion delivery and customs charges. Therefore, the price of gold jewelry in Dubai consists of the current Dubai retail gold rate plus a making charge, which can be negotiated.
In summary, the global market determines the gold price, except in Dubai where the rate is influenced by both the global market and government regulations.
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