Goldfixing

Gold Fixing describes the held since 1919 trading process in gold trading on the London Bullion Market, which is carried out twice a day with the aim to complete as many transactions at a fixed price. Involved here are the representatives of the five so-called bullion banks as members of the London Bullion Market Association ( LBMA ). The calculated fixing rate serves as a benchmark for all other gold transactions.

History

Since the 17th century the price of gold is determined on the London Bullion Market. With the London Gold Fixing on 12 September 1919, the market structure as it exists today was created. The founding members were NM Rothschild & Sons, Mocatta & Goldsmid, Samuel Montagu & Co., Pixley & Abell and Sharps & Wilkins. The chair took over permanently NM Rothschild & Sons. The first gold price 4 pounds, 18 shillings and 9 pence ( GBP 4.18s.9d = 4.9375 ) fixed per troy ounce. The New York gold price was at the same time at 20.67 U.S. dollars per troy ounce.

At this event, the dealer ( clock 11:30 CET) met once a day at 10:30 local time clock in the banking house of Rothschild at St. Swithin's Lane, in order to determine supply and demand. If both was in balance, the participants lowered their British flags, and the gold price of the day was fixed. This price was representative of the total gold trade of the day, although only a small part of the daily gold turnover was involved in price fixing. The Bank of England was not directly involved in fixing; for she was operating the Rothschild through purchases and sales.

After the outbreak of the Second World War, the London gold market closed on September 3, 1939. Fixed price Last were 8.05 pounds sterling per ounce. On March 22, 1954 took place after 15 years back Gold Fixing instead. When opening price 12.42 pounds sterling were determined. This corresponded to 35.00 U.S. dollars per troy ounce.

When the British government, a depreciation of the pound sterling decided in November 1967, then the most important reserve currency after the U.S. dollar, sat on the London Bullion Market a rush on a gold. On March 17, 1968, the gold market was closed again. After re-opening on 1 April 1968 the market was divided into two parts, the prices could continue to freely adapt to the market, the other was fixed. Since this time there is another daily meeting in London at 15:00 clock local time (16:00 CET clock ) to set the price for the opening time of the U.S. stock markets again.

On January 21, 1980, the London fixed price marked in view of the crisis in Iran and the Soviet invasion of Afghanistan a record high of 850.00 U.S. dollars per troy ounce. The London Bullion Market Association ( LBMA ) was founded in 1987 in close consultation with the Bank of England, which was the regulatory authority for the precious metals market at that time. The primary regulatory authority in the UK since the Financial Services Authority (FSA ). In April 2004, withdrew NM Rothschild & Sons from the gold trade and the Gold Fixing. Since 5 May 2004, the gold price will be determined by phone. During the financial crisis, a price above the $ 1,000 mark was fixed on 14 March 2008 with 1003.50 U.S. dollars per troy ounce for the first time.

In March 2013, the International Organization of Securities Commissions opened an investigation on manipulation of the price determination. Background is the uncovering of the LIBOR scandal in 2012, in which is similar to the gold price determined London interbank offered rate was for years systematically distorted by false reports of the banks involved. Concrete suspicions against the gold price is not available, the investigation is to strengthen the " market confidence ".

Members

From the founding members of the London Gold Fixings only NM Rothschild & Sons remained independent. Mocatta & Goldsmid Ltd.. was sold in 1973, a subsidiary of Standard Chartered Bank in 1997 to the Bank of Nova Scotia. Thus also the seat went with the Gold Fixing at the Bank of Nova Scotia - ScotiaMocatta. Sharps Pixley & Abell & Wilkins and merged in 1957 to Sharps Pixley. The latter was in 1966 sold to Kleinwort Benson and 1993 to the German bank, which by a member of the gold fixing was. In January 2014, the German bank explained that she no longer wants to participate in the determination of the official reference prices for gold and silver itself. It justified the withdrawal from the exclusive circle of five Fixing device with the significant reduction of its commodity business. It intends to place in the circle to another member of the London Bullion Market Association to sell. Samuel Montagu & Co. went in 1967 to the Midland Bank, which belongs to the field of HSBC since 1992.

Johnson Matthey Bankers Ltd.. ( JMB ) took over in 1957 the seat of the Gold Fixing of Pixley & Abell. In 1984, JMB temporarily in the possession of the Bank of England, which took over the company in the face of impending losses in the lending business from precious metals company Johnson Matthey PLC world. The central bank sold JMB 1986 at Mase Westpac, the gold Commercial Bank of Westpac. In 1993, the seat went with the Gold Fixing the Republic- Mase Bank (formerly Mase Westpac ), a subsidiary of Republic National Bank of New York ( RNB). The latter was taken over in December 1999 by the HSBC. In May 2000, the seat was sold to Credit Suisse First Boston ( CSFB ). CSFB canceled in October 2001, their membership in the Gold Fixing. In July 2002, the Société Générale took over the seat of CSFB.

NM Rothschild & Sons in 2004 left the Gold Fixing. Since June 7 In 2004 the meeting, which was formerly headed permanently from Rothschild, under a rotating annual chairmanship of the Barclays Bank instead. One representative of the meet to attend this event

• Bank of Nova Scotia - ScotiaMocatta,
• Barclays Bank,
• German Bank AG London,
• HSBC Bank USA, NA London Branch and
• Société Générale,

All members of the London Bullion Market Association ( LBMA ) are.

Price determination

On the London Bullion Market, the world market price of gold is determined. This fixed price is used by major gold holders, such as refineries and mining companies. Most central banks, including the German Bundesbank, refer to the prize at the Gold Fixing in the afternoon (PM Fix), to give their gold reserves worth. Numerous precious metal dealers in retail change their prices daily in overruling the Gold Fixing. The London world market price is used also in the market for gold futures to give as swaps and options a price.

Trade time at the London Bullion Market is open Monday to Friday from 8:50 bis 15:00 clock clock UTC ( 9:50 bis 16:00 clock CET). The Gold Fixing is conducted twice a day with the aim to complete as many transactions at a fixed price:

• Morning: Monday to Friday 10:30 UTC clock ( clock 11:30 CET)
• Afternoon: Monday to Friday 15:00 clock UTC (16:00 CET clock ).

At the beginning of the sessions is called an opening price, and on this basis the action begins. The price at which a balance between supply and demand is possible, is considered the fixed price to be published. In contrast to the fixing of the London Silver Market, which takes place without contact with the outside world, the Gold Fixing is in constant communication with vendors and cede all over the world. In general, the value will take about ten minutes. For financial or political crises, it may take significantly longer. The longest Fixing the story was ended only after two hours and 15 minutes. It took place on Black Monday, 19 October 1987, when the value of the Dow Jones index on the New York Stock Exchange plunged by 22.6 percent.

Between 1919 and 1968 the price of gold was determined only in sterling. Reason was the British dominance in the international financial, economic and trade relations. 1968 quotations were added in U.S. dollars, which was an expression of the growing importance of the U.S. currency in the global economy. Since 1999, the price is also settled in euros. The European single currency is by international standards the U.S. dollar, the main reserve currency of the world.

OTC trading

Trading on the London Bullion Market runs (English: Over-The- Counter, OTC) outside the stock exchange. Trust development it for banks, mining companies and investors is the high liquidity of the market and the fact that the gold bars are actually physically present. The precious metals stored in the London area in LBMA -certified warehouses, which are protected like fortresses. Insight into OTC trading have only the trading partner and - twice a day - the five banks that operate the Gold Fixing.

For trade only bars are approved by Affine Rien and mints that meet certain quality requirements. Bars that are on the London Bullion Market are considered " good delivery" ( Good Delivery ), must have a gold content of at least 350 and at most 430 troy ounces and have a fineness of 995 ‰. They must also bear a serial number and the stamp of a licensed manufacturer or the London gold market precious metal auditor ( Assayer ). Payment and delivery of the Shares traded on the London market gold will be two working days after the conclusion of the transaction. For purchases in fixing a fee of 0.25 percent must be paid: the sales are not burdened by a commission.