ICE Benchmark Administration (IBA) operates the new LBMA Gold Price.

The LBMA Gold Price was launched on the 20th March 2015 to replace the historic London Gold Fix. ICE Benchmark Administration (IBA) provide the auction platform, methodology as well as overall independent administration and governance for the LBMA Gold Price, with the LBMA holding the intellectual property rights.


Background

The price continues to be set twice daily (at 10:30 and 15:00 London BST) in US dollars. Prices are also available in a further eleven currencies (Australian Dollars, British Pounds, Canadian Dollars, Euros, Onshore and Offshore Yuan, Indian Rupees, Japanese Yen, Singapore Dollars,South African Rand and Swiss Francs) but these are indicative prices for settlement only. The independent third party provider, ICE Benchmark Administration (IBA) were chosen following consultation with market participants. IBA provides the price platform, methodology as well as the overall administration and governance for the LBMA Gold Price. The IBA's platform provides an electronic, auction-based, tradeable, auditable and fully IOSCO-compliant solution for the London bullion market. For further information contact the LBMA at Au.Consult@lbma.org.uk or the IBA at iba@theice.com.

Accredited Price Participants

There are thirteen price participants who have been accredited to contribute to the LBMA Gold Price: Bank of China, Bank of Communications, China Construction Bank, Goldman Sachs International, HSBC Bank USA NA, ICBC Standard Bank, JP Morgan, Morgan Stanley, Societe Generale, Standard Chartered, The Bank of Nova Scotia - ScotiaMocatta, The Toronto Dominion Bank and UBS.

Licencing Arrangements

On the 1st October, 2015 IBA introduced a new commercial model for the LBMA Gold Price. Firms that use the LBMA Gold Price in valuation and pricing activities, or that reference the price in exchange traded products, or that offer for trading or clearing contracts that reference the price, or that redistribute the price data to third parties, may need to enter into a licence with IBA. For more information regarding IBA's licensing arrangements please refer to IBA's website or contact IBA's licensing team at iba-licensing@theice.com or +44 (0)20 3540 7200 (UK) / +1 347 252 6465 (US)

A set of Frequently Asked Questions (FAQs) is set out below. IBA have also prepared a set of FAQs which are available here.


Frequently asked questions:

  • What are the main features of the new process?

    IBA host an electronic auction process for the LBMA Gold Price. The auction process is independently administrated, tradeable, electronic and physically settled, conducted in dollars, with aggregated and anonymous bids and offers as well as being published on-screen and in real-time.

  • Is the LBMA Gold Price still set twice daily?

    Yes, the price is set twice daily in US $ dollars at 10:30 am and 3:00 pm each business day.

  • Where can I source the LBMA Gold Price?

    The LBMA Gold Price is available on the LBMA website with a 30 minute delay. In addition the data is available from a wide range of Data Vendors and Redistributors which are listed in the spreadsheet which you can download here. The live auction can be viewed on Reuters using the codes 0#XAUFIXAM for the am auction and 0#XAUFIXPM for the pm auction and on Bloomberg using the ticker GOAULNAM for the AM auction and GOAULNPM for the PM auction (these tickers can also be accessed by running the {LBMA} page on Bloomberg). The prices can also be accessed via other Data Vendors such as Fastmarkets (where in the absence of vendor codes you should click on "LBMA Gold Price").

  • How does the auction process work?

    The chairperson sets the starting price and the price for each round in line with current market conditions and the activity in the auction. Participants then enter their buy and sell orders by volume (i.e. number of ounces). The price discovery process is in US Dollars but participants may, if they wish, request to settle in different currencies. If the net volume of all participants fall within the pre-determined tolerance at the end of a round (i.e. the imbalance is set at 10,000 oz.), the auction will be complete, with all volume tradeable at that price. Netting of orders is processed automatically for participants with all house and client orders, plus any share of the imbalance, contributing to their final net volume. This net volume is then matched against other participants to produce trades with immediate trade confirmations.

  • What is the imbalance?

    An auction can conclude with up to a 10,000 ounce difference between the entered buying and selling interest. This is referred to as the imbalance.

  • How is the imbalance settled?

    To ensure fairness this imbalance is shared out among the direct participants equally, irrespective of whether they entered interest into the auction or not. This is to ensure continuity of the existing process as well as certainty of the imbalance for direct participants.

  • How can I become a participant?

    The auction is designed to be transparent and allow as many participants as possible. Please contact IBA for more information on becoming a participant: iba@theice.com or Tel IBA on +44 20 7429 7100.

  • What information is available at the end of the auction process?

    At the end of the auction process, IBA will publish the benchmark price. IBA will also publish a Transparency Report showing for each round: the price in USD; the aggregated bid and offer volume; the number of participants; and the timings for each round. The benchmark price is additionally published in Australian Dollars, British Pounds, Canadian Dollars, Euros, Onshore and Offshore Yuan, Indian Rupees, Japanese Yen, Singapore Dollars,South African Rand and Swiss Francs.

  • What information is available during the auction process through redistributors?

    The major market data redistributors will display: At the start of each round – the price that is being tried for that round of the auction At the end of each round of the auction – the aggregated bid and offer volume at the end of that round.

  • How should the price be referenced in documentation?

    The official registered name of the benchmark is “LBMA Gold Price”. From the close of business on March 19, 2015 the London Gold Fix will cease. Any documentation which refers to London Gold Fix or similar should be updated to reference the “LBMA Gold Price” from March 20, 2015.

    Documentation that specifically refers to the LBMA Gold Price published at 10:30am London time should be updated to refer to “LBMA Gold Price AM”. Documentation that specifically refers to the LBMA Gold Price published at 3:00pm London time should be updated to refer to “LBMA Gold Price PM”.

    ISDA have made amendments to their definitions as follows:

    "GOLD–LBMA PRICE-AM" means that the price for a Pricing Date will be that day’s morning London Gold price per troy ounce of Gold for delivery in London through a member of the LBMA authorized to effect such delivery, stated in U.S. Dollars, as calculated and administered by independent service provider(s), pursuant to an agreement with the LBMA, and published by the LBMA on its website that displays prices effective on that Pricing Date.

    "GOLD–LBMA PRICE-PM" means that the price for a Pricing Date will be that day’s afternoon London Gold price per troy ounce of Gold for delivery in London through a member of the LBMA authorized to effect such delivery, stated in U.S. Dollars, as calculated and administered by independent service provider(s), pursuant to an agreement with the LBMA, and published by the LBMA on its website that displays prices effective on that Pricing Date.

  • Do I need to license with ICE Benchmark Administration to use or redistribute the LBMA Gold Price?

    Firms that use the LBMA Gold Price in valuation and pricing activities, or that reference the price in exchange traded products, or that offer for trading or clearing contracts that reference the price, or that redistribute the price data to third parties, may need to enter into a licence with IBA. For more information regarding IBA's licensing arrangements please refer to IBA's website or contact IBA's licensing team at iba-licensing@theice.com or +44 (0)20 3540 7200 (UK) / +1 347 252 6465 (US)

  • Is the LBMA Gold Price a regulated benchmark?

    From 1 April 2015 the LBMA Gold Price became a regulated benchmark, as it is a specified benchmark’ for the purposes of Art 63O of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.