What is the London bullion market? How LBMA gold and silver prices are set
LBMA is not an exchange. It is the standards body for London’s wholesale over-the-counter precious-metals market. Here is how the gold and silver benchmarks are formed and why they do not map one-for-one into a retail gram price.
In this article
The short answer: the London bullion market is not one exchange or one screen. It is a global centre where large quantities of gold and silver trade mainly over the counter. LBMA sets market standards and owns the benchmark names, while ICE Benchmark Administration operates the gold and silver reference auctions.
Three distinctions that matter
- The LBMA Gold Price is not the same as a continuously moving spot quote. It is the benchmark result of two electronic auctions on London business days, at 10:30 and 15:00 local time.
- Participants submit buy and sell interest in ounces during each round. The gold auction can conclude when the net imbalance falls within a 10,000-ounce tolerance, with matched volume trading at the final price.
- A Turkish-lira gram-gold value needs more than the dollar ounce benchmark. USD/TRY, the 31.1034768-gram troy-ounce conversion, purity, product premium, tax or fees and the bid-ask spread all matter.
LBMA benchmark times and units
Times are local to London. The corresponding time in Türkiye can shift during the year because the countries follow different daylight-saving calendars.
| Benchmark | London time | Frequency | Base unit |
|---|---|---|---|
| LBMA Gold Price AM | 10:30 | Once per business day | USD / fine troy ounce; 995 gold |
| LBMA Gold Price PM | 15:00 | Once per business day | USD / fine troy ounce; 995 gold |
| LBMA Silver Price | 12:00 | Once per business day | USD / fine troy ounce; 999 silver |
Is the London bullion market an exchange?
No. The term describes the institutional ecosystem in which gold, silver and other precious metals trade predominantly over the counter, meaning between counterparties. LBMA is the market’s standards body: it manages Good Delivery lists, market practices and the intellectual-property rights to the benchmark names. Because transactions are not consolidated into one central order book, phrases such as “the LBMA exchange opened” or “the LBMA closing price” can be misleading.
How does the gold auction find a price?
ICE Benchmark Administration runs an electronic, tradable and auditable auction platform. The chair sets a starting price in line with market conditions, and direct participants enter buy and sell orders in ounces at that level. Each round includes a 30-second order-entry window. The price is adjusted across rounds to balance buying and selling interest. For gold, the auction can conclude when the net difference falls within the 10,000-ounce tolerance; the result becomes the LBMA Gold Price.
Why are there separate morning and afternoon prices?
Gold has two distinct price-discovery moments: the AM auction at 10:30 and the PM auction at 15:00 London time. Foreign exchange, interest rates, geopolitical news, central-bank demand and physical flows can change during the day, so the two results need not match. The silver benchmark is set once at 12:00. These benchmarks do not replace continuously moving spot and futures prices; they are time-specific references used in contracts, valuations and settlement.
Why is “London Fix” no longer the correct name?
LBMA says the former London Gold Fix ceased at the close of business on March 19, 2015. From March 20, 2015, the registered name has been LBMA Gold Price. The process now relies on an electronic, auditable auction. Modern coverage that uses “fixing” outside historical context should therefore make clear that it is the legacy name, not the current official designation.
CALCULATION · How do you convert ounces into gram gold?
The theoretical metal conversion is: (gold ounce price in USD × USD/TRY) ÷ 31.1034768. If the ounce benchmark changes by $100 while the exchange rate is unchanged, the pure-metal move is about $3.215 per gram before converting it into lira. That is only arithmetic. Purity, fabrication, tax, transport or storage, product premium and the bid-ask spread can make a bank, dealer or physical-product quote differ.
MY MONEY AND PORTFOLIO · Which price should I compare?
A short-term investor should focus on the executable bid and ask offered by the institution used for trading; an LBMA benchmark is not a retail quote. A fund or derivative can specify its own tracked index, valuation time, FX conversion, management fee and tax treatment. Physical bars and coins also carry purity and product-premium considerations. Different gram-gold quotes at two institutions on the same day are therefore not automatically evidence of bad data.
MY BUSINESS · Where does benchmark risk arise?
A company that imports, processes or holds gold-priced inventory should state which LBMA session, exchange rate and value date applies to a contract. Choosing AM rather than PM, a London rather than Istanbul timestamp, or a different FX source can change cash flow. Credit, hedge and supply agreements should also include a fallback for benchmark disruption or a London bank holiday to reduce operational ambiguity.
Calculation notes
Auction times, the administrator, the 10,000-ounce tolerance and official naming come from LBMA guidance; the 30-second round structure comes from ICE Benchmark Administration; the regulatory context comes from the FCA. No licensed live or historical LBMA price series is reproduced here. The ounce-to-gram formula uses the fixed 31.1034768 grams per troy ounce; tax, fees, FX and provider quotes vary. This is not investment advice.
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