What Is the 4pm London Fix?

By Anna Duncan

The 4pm London Fix: Understanding the Benchmark for Precious Metals

If you are a trader or investor in precious metals, chances are you have heard of the 4pm London Fix. But what is it exactly and why is it so important in the world of precious metals trading? Let’s dive into this topic and explore everything you need to know about the 4pm London Fix.

What is the 4pm London Fix?

The 4pm London Fix, also known as the London Gold Fix, is a benchmark price for gold that is set twice daily by five members of the London Bullion Market Association (LBMA). The members meet at 10:30am and 3:00pm (London time) to determine a fair price for gold based on current market conditions and supply and demand factors.

This benchmark price serves as a reference point for gold prices around the world. It is used by traders, investors, and central banks as a way to value their gold holdings and make informed decisions about buying or selling.

How is the 4pm London Fix determined?

The five members of the LBMA who determine the 4pm London Fix are Barclays Bank, HSBC Bank USA NA, The Bank of Nova Scotia – ScotiaMocatta, Société Générale SA, and UBS AG. These banks are responsible for buying and selling large quantities of gold on behalf of their clients.

During each fixing session, each bank submits its buy and sell orders for gold based on current market conditions. The buy orders are matched against sell orders until there is an equilibrium price at which all orders can be filled. This equilibrium price is then declared as the benchmark price for that fixing session.

Why is the 4pm London Fix important?

The 4pm London Fix serves as a global benchmark for gold prices. It is used by traders and investors as a reference point for valuing their gold holdings and making investment decisions. The benchmark price is also used by central banks as a way to value their gold reserves.

The 4pm London Fix has a long history, dating back to 1919 when it was first introduced by the Bank of England. Today, it remains one of the most important benchmarks for precious metals trading and is recognized around the world.

Conclusion

In summary, the 4pm London Fix is a benchmark price for gold that is set twice daily by five members of the LBMA. This benchmark price serves as a reference point for gold prices around the world and is used by traders, investors, and central banks as a way to value their gold holdings and make informed decisions about buying or selling. Understanding this important benchmark is essential for anyone involved in precious metals trading or investment.

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