The traditional gold price benchmark, the London Gold Fix, has now been replaced by a new, independent auction-based benchmark.
The new LBMA Gold Price was launched on March 20, replacing the London Gold Fix, with a new, independently administered, transparent, electronic auction process. ICE Benchmark Administration (IBA), which administers the new benchmark, reports that six firms were involved in the auction on the first day: Barclays, Goldman Sachs, HSBC Bank USA NA, Bank of Nova Scotia’s ScotiaMocatta, Societe Generale and UBS.
IBA is now operating physically settled, electronic and tradable spot gold auctions twice a day, at 10.30 am and 3.00 pm UK time. The price calculated in U.S. dollars, and participants have the ability to settle orders in dollars, Euros and British pounds. IBA reports that on the first day, a total of 95,568 ounces were bought, and 90,348 ounces were sold, across both auctions.
“Following Friday’s transition, the LBMA Gold Price benefits from improved transparency with all auctions now taking place on WebICE, ICE’s state-of-the-art and widely distributed, front end trading platform. Importantly, house and client orders can be segregated on WebICE and all participants, including end clients, can view and manage their own orders on-screen from anywhere in the world,” said Finbarr Hutcheson, president of IBA.
The LBMA Gold Price will become a regulated benchmark under the rule of the UK Financial Conduct Authority (FCA) starting on April 1.