The London Gold Fix

In the London gold fix, a reference price for gold is set twice each business day by five market-making members of The London Gold Market Fixing company.

The fix, as it is known, is widely used as a reference and benchmark price for settling contracts on a given day by players in the gold market and for gold derivatives contracts.

It has been the focus of scrutiny from regulators who are concerned about the fairness and openness of financial markets

The five-market making members are Société Générale, Scotiabank, HSBC, Deutsche Bank and Barclays. Deutsche Bank announced in 2013 that it was placing its seat on the panel up for sale.



The London Gold Fixing company dates back almost one hundred years – the first recognizably modern gold fix was set (telephonically) on September 12, 1919 at 11:00 GMT. The price that day was £4.18s.9d. per fine ounce; the New York price of gold that day was $20.67 per ounce.

But the telephonic method was quickly dropped – the interested parties started to hold formal meetings at the offices of NM Rothschild in New Court, St Swithin’s Lane, London.

The original five founding members were N M Rothschild & Sons; Mocatta & Goldsmid; Samuel Montagu & Co; Pixley & Abell; and Sharps & Wilkins.

Fixing was suspended for 15 years following the outbreak of the Second World War but it was reinstated in 1954. Face-to-face meetings were eventually abandoned and the fix is now set by telephone once again.

Outside of Deutsche Bank’s notice of intent to sell its seat on the fix, the most recent change came in 2004 when NM Rothschild sold its seat to Barclays.

The highest ever gold fix was recorded during the afternoon sessions on September 5 and 6, 2012 at $1,895 per ounce, shy of the all-time high of $1,921.10 in spot trading.



At the start of the fixing process, the chairman – currently SocGen’s Vincent Domien – will determine the prevailing US dollar spot price for loco London gold. Each member will then declare whether it has buying, selling or no interest.

If there is no interest at this price, the rate is set and the fix declared. But if, as is more likely, there is either a net buying or selling interest of more than 50 bars, the price is moved higher or lower.

“If for example 100 bars are on offer but only 25 bars are wanted then the chairman will progressively move the price downwards and at each stage ask for expressions of buying and selling interest and then for figures,” the London Gold Market Fixing website explains.

“Likewise if 100 bars are wanted and only 25 bars are on offer then the chairman will progressively move the price being tried upwards,” it adds. “This process continues until supply meets demand or the imbalance is 50 bars or less and the chairman decides to declare a pro-rata fixing and the price fixed.”

During the telephonic meeting that decides the fix, players in the wider market have access, either by telephone or computer, to the process – anyone with deep enough pockets can see the price being fixed. If they have accounts with the market-making banks, they can also add or remove orders and would know if the price moves did not reflect their orders or the prevailing open market price.