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How the Gold and Silver Prices Are Determined

07 March 2023

Gold and silver are among the most highly traded precious metals, sparking significant interest in understanding the factors that determine their prices and how to obtain accurate precious metal price information.

If you're interested in learning more about the precious metals market or how to obtain spot prices of silver and gold, you're in the right place.

Without waiting further, let’s deep dive into the factors determining prices for gold and silver:

How is Gold Price Determined?

The prices of gold bullion are influenced by various factors, such as the balance of supply and demand for physical gold, shifts in the commodities market, actions taken by central banks, adjustments in interest rates, and fluctuations in the value of the US dollar, among others.

One of the factors influencing supply and demand is investors using gold as a safe haven to protect their wealth during economic uncertainty or geopolitical tension. Another factor is the cost of Gold production cost which varies with the price of gold itself.

How is the Price of Silver Determined

The price of silver bullion is determined by a multitude of factors, similar to those affecting the gold market. These include the balance of supply and demand for physical silver, movements in the commodities market, decisions made by central banks, fluctuations in interest rates, and changes in the value of the US dollar.

However, silver possesses unique characteristics as an industrial metal, impacting its price dynamics. Its usage in various industrial applications, such as electronics, solar panels, and medical equipment, adds another layer of complexity to its pricing. Economic indicators reflecting industrial activity and technological advancements can also influence silver prices.

Additionally, while both gold and silver are often considered safe-haven assets during times of economic uncertainty, silver's dual role as an industrial metal may lead to divergent price movements compared to gold in certain market conditions. Moreover, the relative abundance of silver compared to gold can affect its price sensitivity to changes in supply and demand dynamics.

Now that we covered factors determining precious metal prices let's look at some of the popular Fixing and benchmarks set globally.

What is London Fix?

The London Gold Fixing is the most popular fixing that is relied upon to benchmark prices for Gold. The "London Fix" is administered by the London Bullion Market Association (LBMA) and serves as the method for establishing daily global prices for precious metals such as silver, platinum, and palladium, with gold being the most significant.

Not to be confused by London Forex Fix or London 4 pm Fix

The "London Fix Price" represents an established fair value for precious metal, determined by the current levels of buying and selling interest at different price points and mutually agreed upon by member banks of the LBMA.

The LBMA Gold Price is set twice daily, at 10.30 AM and 3.00 PM UK time, by the ICE Benchmark Administration (IBA). The IBA operates an electronic auction platform called the LBMA Gold Price Auction, which is used to determine the benchmark price.

Here are the price-setting timings for various precious metals:

London Gold Fix: 10:30 AM & 3:00 PM

London Silver Fix: 12:00 PM

London Platinum Fix: 9:45 PM & 2:00 PM

Please note that all the timings are as per GMT. 

Though these benchmarks have significant clout their importance has gone down with the advent of the 24-hour fluctuating spot market. The Spot Gold and Silver Prices are hence essential for anyone dealing in the precious metal market. The spot prices are the current market rates at which a metal is bought or sold for immediate payment and delivery. Usually, spot prices of gold and silver refer to prices of one ounce of gold and silver. 

Is there an Official Closing Price for Gold and Silver?

Precious metals are traded globally through various OTC markets. There is no ‘official closing price’ for them. However, traders and analyzers can either go with the ‘fix’ for that day or rely on their market data vendors that calculate the closing price following a proven documented methodology. 

Precious Metals Trading Hours

We offer real-time data for precious metals CFDs, facilitating informed trading decisions. While CFD markets have trading hours, precious metals are traded globally, with no official closing price. Our Gold and Silver CFDs are open from 5 PM EST on Sunday to 5 pm EST on Friday.  

Rely on Us for Gold and Silver Market Data

As is crucial to access accurate and reliable gold and silver prices it is also a very expensive and hassled process. Hence, we aim to simplify the process and aggregate these prices to ensure quality, accuracy, and reliability in real time. We are committed to making market data accessible to all. Thus, you can benefit from our well-designed data subscription plans to get real-time and historical data, conduct market analysis, and make informed trading decisions.