The "London Gold Fix" — now formally called the LBMA Gold Price — is the daily benchmark price used in gold contracts, derivatives, mining royalties, central bank valuations, and consumer jewelry pricing around the world. Its history stretches over a century, and it has evolved from a small group of bankers meeting in a room to a fully electronic auction process regulated by the UK's Financial Conduct Authority. Understanding how it works, why it matters, and what changed after the 2013 price manipulation scandal provides important context for understanding how global gold prices are actually determined.
Historical Origins: 1919–2015
The London Gold Fix originated on September 12, 1919, when five representatives of London bullion banks gathered at N.M. Rothschild & Sons to set a daily gold price. The process was simple: a chairman proposed an initial price, participants indicated whether they had buying or selling interest, and the price was adjusted until supply and demand balanced. A small Union Jack flag on each participant's desk could be raised to pause the proceedings — hence the colloquial term "fixing."
For decades this process functioned adequately, though it was opaque and dominated by a small cartel of banks. The fixing moved from phone calls to electronic chat rooms as technology evolved, but the fundamental structure — a small group of large banks setting a benchmark price — remained unchanged for nearly a century.
The 2013–2014 Manipulation Scandal
In 2013–2014, academic research and regulatory investigations revealed systematic anomalies in gold price behavior around the daily fix times. Statistical analysis showed that gold prices disproportionately moved in specific directions immediately before and after the fix, in patterns inconsistent with random trading. Multiple banks were investigated by regulators in the U.S., UK, and Germany.
Barclays was fined £26 million by the UK FCA in 2014 for allowing a trader to manipulate the gold fix to benefit the bank's derivatives position. Deutsche Bank paid $60 million in 2016 to settle U.S. class-action lawsuits alleging gold price manipulation. These cases confirmed that the old fixing process had structural vulnerabilities that participants exploited.
The Modern LBMA Gold Price Auction
In response to the scandals, the London gold benchmarking process was completely restructured. Since March 20, 2015, the LBMA Gold Price has been administered by ICE Benchmark Administration (IBA) — independent of any participating bank — and conducted as a fully electronic, auditable auction. The process now:
- Runs at 10:30 AM and 3:00 PM London time
- Involves a much larger group of direct and indirect participants (over 15 direct participants as of 2025)
- Is fully electronic with complete audit trail and regulatory oversight
- Publishes the price within seconds of the auction clearing
- Is regulated by the UK Financial Conduct Authority under the EU Benchmarks Regulation
Why the Fix Matters
The LBMA Gold Price is referenced in an estimated $20 trillion+ in financial contracts globally — including gold ETF valuations, mining company royalty calculations, central bank reserve valuations, and OTC derivatives. Gold IRA custodians typically use the LBMA Gold Price (or the COMEX closing price) as the fair market value for annual Form 5498 reporting. When gold price quotes reference "the fix," they are referring to this twice-daily benchmark — the closest thing the global gold market has to an official price. Explore gold's long-term price history benchmarked against this standard.