The LBMA Gold Price is one of the three main ways in which the price of gold is set around the world. Also known as the London Gold Price Auction, it is used for large value transactions to help ensure a fair and more stable price.
Unlike the
gold spot price,
which fluctuates constantly, the LBMA Gold Price is set just two times a day – 10:30 and 15:00. These gold prices are determined by 16 of the world’s major banks via auction, and is administered by the ICE Benchmark Association on behalf of the LBMA. You can find further information on these banks on the
LBMA’s Gold Price Auction page.
How is the LBMA Gold Price set?
The 16 banks on the LBMA’s accredited list take part in an electronic auction, at the two allotted times of the day. The auction is held in rounds of 30 seconds with bids on large volumes of gold. Over the course of multiple rounds, a gold price is agreed and published.
Full records of each auction are kept and published on the ICE website to ensure greater transparency after earlier methods were plagued with complaints over a lack of clarity and rigging claims. You can find more information on the IBA and their role in the gold price auctions via their website.
Similar auction prices are also released for silver, platinum, and palladium and are used for the same reasons.
Why do we use the LBMA Gold Price?
Using the LBMA’s gold price helps ensure a fair price for either party involved in any transaction. When dealing with high values, the constant fluctuation of spot price can mean even a fraction of a percent rise or fall in the gold price could mean a significant loss or gain depending on which side of the transaction you are on.
By using the LBMA's auction price this volatility is largely removed. As the price is agreed across 16 banks via the IBA this also helps average out the price to a fair value. It should be noted the auction price is often similar to the spot price at the time, varying only slightly.
At GOLD.co.uk we use the LBMA gold price for both sales or purchases around and above £50,000 in value. If using the auction gold price, the team will let you know how the process works, and what time to expect confirmation on the price paid. For any queries regarding the LBMA gold price please email us via support@gold.co.uk and the team will be happy to help.
