Did you know... While the global gold price is always quoted in US Dollars ($), it's actually calculated on a twice daily basis in Pounds Sterling (£) by the London Bullion Market Association!
Gold is a sensitive commodity which can be affected in value on a minute-by-minute basis by supply, demand and financial market activities around the world - but how is the actual daily gold price set?
The widely accepted benchmark for gold pricing is controlled by the London Bullion Market Association. Twice a day, five members of the LBMA meet and 'fix' the gold price, this generally takes place at 10:30 and 15:00 each day.
The London Bullion Market Association was formed in 1919 and consited of the five principal London gold traders of the time - Rothschild & Sons, Samuel Montagu & Co, Mocatta & Goldsmid, Pixley & Abell and Sharps Wilkins. The first price fixing was set on the 12th September 1919 and was agreed at £4.9375 per troy ounce (18 Shillings and Ninepence in old money).
The five current day members of the LBMA responsible for fixing the price of Gold are Barclays Capital (Acquired Lehman Brothers in 2008), HSBC (The world's third largest bank), Deutsche Bank (Instrumental in building the original Northern Pacific Rail road), Société Générale (Paris based French bank with operations in over 77 countries worldwide) and Scotia-Mocatta (Part of the Bank of Nova Scotia).
Although the gold price is fixed twice a day by the LBMA, the price changes almost immediately as trades are made based on the new price fix - The fixed price serves as a point of reference or benchmark for financial institutions and related gold industries.
For further information on the London Bullion Market Association visit their website at www.lbma.org.uk.