The LBMA, incorporated on 14th December 1987,
brought together two former bodies: the London Silver Market
(which dates its former origins to 1897 when the first Silver
Fixing meeting was held) and the London Gold Market. The functions
of both bodies were absorbed with the exception of the fixing
meetings, which are held and controlled, independently by two
groups of Market Maker Members within the
LBMA.
The London Gold Market identifies its former origins with
the first Gold Fixing, which was held on 12th September1919
at the London offices of N M Rothschild & Sons at New
Court, St Swithin’s Lane, London EC4. Only bars melted
and assayed by trusted entities were accepted. The earliest
known list issued by the London Gold Market in October 1934,
records the names of 20 approved Meters and Assayers in 11
countries.
Since 1919, the Gold Fixings, whereby gold is traded internationally
through 5 firms in order to balance prevailing supply with
demand at a single price at the same time, have taken place
daily at New Court, apart from two periods when the market
was closed:
(1) From 3rd September 1939, following the outbreak of the
Second World War, until reopening on 22nd March 1954.
(2) From 1st March 1968 until reopening on 1st April, during
which period the world’s central banks and the International
Monetary Fund (IMF) devised a “two-tier” gold
market in order to deal in gold at the official price of USD
35 an ounce among themselves while allowing the “free”
market to determine its own price.
The 5 firms through which the Gold Fixing prices in US dollars
are derived twice daily at meetings starting at 10.30 am and
3.00 pm.
The Gold Fixing prices were originally quoted in sterling
at a daily morning meeting only. US dollar pricing and the
3.00 pm meeting were introduced in April 1968.
The volume of gold traded through the Gold Fixing meetings
cannot be ascertained, as each of the 5 firms totals the order
of its individual customers worldwide into a net requirement
to buy or to sell at various levels of the good price.
The Bank of England, which now supervises the wholesale bullion
market in the United Kingdom following the Financial Services
Act 1986, has formal responsibility for the LBMA’s code
of practice.
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