ICE refines the Gold Fix
ICE Benchmark Administration continues to adjust the process used to set the LBMA Gold Price, the revamped benchmark for daily gold prices. IBA, a subsidiary of Intercontinental Exchange, was appointed by the London Bullion Market Association in November 2014 to serve as an independent administrator of a new price discovery process for the gold benchmark, which for nearly a century had been set via daily meetings of bullion dealers in London. The new price was launched in March and is now set through an electronic auction process for trading physical gold, with participation from seven banks.
In April, IBA issued a consultation asking for market feedback on three issues related to the price discovery process. First, IBA asked for comment on how the benchmark price should be determined in the event that the minimum number of participants are not present, i.e., should it publish the opening price of the auction, or not publish a price at all. Second, IBA said it planned to review the long-standing convention to add a “seller’s premium” to the benchmark price for settlement purposes. Third, it asked for feedback on the usage of gold prices published in currencies other than U.S. dollars such as euros and pounds sterling.
The consultation closed in May. IBA said it will publish the results and feedback of the market consultation in due course.
