«London fixing" - a phrase that is often heard in analytical forecasts precious metals market.Financial procedure known to all the major players in world commodity markets, it has a significant impact on pricing in the framework of international trade in precious metals.
What is fixing?
London fixing can be defined as the process of determining the value of gold on the London interbank market for gold.It was there that form the basis of supply and demand for the metal.Fixing is carried out twice a day throughout the week.There are daily price determination (AM fix) at 10.30 am and in the evening the determination of prices (PM fix) at 15.00.For convenience, it was decided to focus GMT.The cost of the precious metal during the procedure set simultaneously in three of the strongest currencies of the world: the US dollar, the pound sterling and the euro.The price is fixed per troy ounce.
history of the process of determining the value of precious metals
London fixing for precious metals has been developed with the sole purpose to fix and regulate contracts between members of the London bullion market (London Bullion Market).Today, it is assumed that it determines the maximum fixing the fair value of gold, which is then used for the signing of contracts for the supply of this precious metal bullion.On the fixed asset are guided around the world, including pawn shops and jewelry production.History of fixing the value of the asset began when in 1919 there was a devaluation of the pound sterling.At that time, the bank Rothschild received permission from the Central Bank of England to sell the South African yellow metal.The Bank had to determine the price of the asset that would satisfy not only buyers in the market, but also sellers.Since September 12, 1919 held its first London fixing.According to him an ounce of gold was worth 4 pounds 18 shillings and 9 pence.In recalculation on the American currency at the time it is 20.67 dollars.
Actors pricing, or an excursion into the past
At the root of fixing it was attended by the five biggest producers of the last dynasties and sellers:
- NM Rothschild & amp;Sons.
- Pixley & amp;Abell.
- Mocatta & amp;Goldsmid.
- Sharps Wilkins.
- Samuel Montagu & amp;Co.
In the period from 1939 to 1954, the process was not carried out.This was directly related to the complete closure of the gold market in the period of the Second World War.The biggest price jump in the history of the implementation process was recorded in 1980, when an ounce of gold was valued at $ 850.Rising asset prices associated not only with an unexpected increase in oil prices on the world market, but also has to do with inflation and the crisis in the Middle East.The highest price of gold, which is defined by the London fixing on the official start, took place in 2011, August 23.The price of the asset at the time reached 1911.46 dollars per troy ounce.
Fixing and its members
London fixing - is the process of fixing the value of the precious metal, which has a certain similarity with the auction.As subjects of the tender are the bullion Good Delivery, which weight is 400 ounces.In a kind of auction for the five largest banks:
- Deutsche Bank.
- Société Générale.
- HSBC.
- Scotia Mocatta.
- Barclays Capital.
In the auction can participate and investors, but only through dealers, which act in the face of the above-mentioned banks.Representatives of financial institutions keep in touch during the process with their banks, and they, in turn, in real-time to inform its own clients.London fixing for gold begins with the announcement of the Chairman of the value of the metal that is most relevant at the moment.This cost through dealers disclosed bidders.In the opposite direction is informed that as there are sales and purchases in accordance with the specified value of the asset.
Flexible partnership
Each bidder has the right to change his course of its status as the seller on the status of the buyer on the basis of supply and demand - this is the trait that distinguishes London fixing.Silver, gold, platinum, palladium can then be bought, then sold stakeholders until the final cost of the latest ads.Change of subject, not only the position of the participant, but the volume of its operations.The price of assets will rise something, then lowered depending on the volume of purchases and sales."Swing" will occur as long as supply and demand will be in the balanced state.The procedure takes 5 to 40 minutes.
longest in the history of fix was registered on 23 May 1990.Its duration was 2 hours and 40 minutes, it coincided with the crisis in the Persian Gulf.To fix the final amount of the asset, the difference between the offers buyers and sellers should not be over 50 bars.If the bidding process is not possible to fix the price, it is determined at the discretion of the Chair is called "fixing at will."Such a situation is extremely rare.
how much to pay for precious metals bidders?
the auction you are interested in a variety of precious metals: gold, palladium, silver, platinum.London fixing allows you to purchase the asset at the most competitive price, as well as sales.When the bidding ended, the participants carried out the payment of the asset in accordance with existing applications.The seller receives a payment of the metal at a fixed price.Buyers pay for the assets, in addition to the fixed price, and even over 25 cents of every dollar.Buyers silver overpay for a similar scheme 0.0025 cents.Buyers pay for the platinum price fixing, plus another dollar.Rate of gold - London fixing defines it through trades - immediately announced the news agencies of the international level, which are spread in all directions.Most effectively reflects the pattern of the daily fixing, since in the course of carrying out its work in full swing the markets of America, Africa, the Middle East and Europe.Daily Fix serves as a guide to all banks of the world in a variety of states.
definition of quotations of gold not only in dollars, euros and pounds
London fixing price for gold ounce set in euros, pounds and dollars.These quotes define the development of the market, as act as the most important fundamental indicators.An exception to the general rules for the formation of the value of gold is the Russian market, where an ounce of the precious metal is calculated in rubles, and the Shanghai Stock Exchange, where the same indicator set to RMB.For investors from Russia and China's analytical work more complicated, since they have to assess the situation not only in London, New York and other stock exchanges, but also on the domestic market.
situation in Russia
In today's unstable economic situation in Russia, and fixing his performance began to play for a greater role of domestic investors.The depreciation of the ruble leads to the fact that people are showing more interest in gold assets, which is supported by systematic depreciation of the national currency.
By the end of 2014 to purchase the precious metal could be carried out at a price of 3055 rubles.Its sale was carried out at the price of 1465 rubles.This course is offered the country's largest bank - Sberbank.With increasing demand from residents of Russia's precious metals quotes on the stock exchanges in pairing with Rouble grow.The trend holds for a long time, allowing you to set the price of the asset is much higher than defines the procedure for fixing.The difference between the actual price fixing and accessible to private investors, the proceeds of dealers who carry out asset transactions directly during fixation.
