How Gold Market Price is Determined

Image of gold bars closeup. Gold Bullion.

Share This Post

The Gold Fixing Process

The first gold rush of 1697 brought the first gold from Brazil to London. Today, the LBMA (London Bullion Market Association) manages the London Good Delivery List, the only bullion market accreditation accepted across the globe.

For over a century, five companies ran the London Gold Market Fixing Company and set prices through a process conducted by telephone called the “London Gold Fix.” In 2015, the IBA (ICE Benchmark Administration) took over and replaced the process with an electronic auction system called the LBMA Gold Price. The LBMA owns the rights to the process. An oversight committee, banks, and a panel of chair members make up the IBA.

The members of the London Gold Market Fixing Limited meet twice daily at 10:30 a.m. and 3 p.m. GMT. The chairman announces a starting price and each bank specifies how many bars of gold they will buy or sell at that price.

If there are too many buyers and too few sellers, the price is raised; if not enough buyers want to buy at a certain price, it is lowered. When the number of buyers and sellers are within 50 bars of one another, the price is set.

Wondering if your gold chain is real? Read more about how to test it here.

Benefits of Gold Fixing

Gold fixing prices are widely used by people and businesses all over the world. This process helps parties work with a universally accepted price standard, making it easier and fairer to conduct business.

Banks use these prices to conduct trading on the gold futures market and to value daily inventory, while refineries and mines use market prices to value their inventories. Sellers also rely on these prices to set prices for gold and objects that use gold as part of their manufacturing process.

Are you looking to get the best price for your gold? Call us today for a free quote

Other Factors That Influence Gold Prices

What affects gold prices other than the LBMA pricing process? Three main external factors have a significant influence on the price of gold.

  1. Supply and Demand

The basic principle of supply and demand is a major influencer of gold prices. When gold demand is high and supplies are low, gold prices will rise. In the opposite scenario of high supply and low demand, prices decrease.

Since gold is finite, supplies will always be limited. By some analysts’ measure, the world reached peak gold years ago, so production levels will only continue to decline. Gold demand from investors, central banks, and the medical and technology sectors remain strong. This means a steady increase over time.

  • Market Conditions

Political and economic events shape a lot of market conditions, which also influence gold prices. Gold prices often tend to reflect a nation’s economic health. In recent years, political and economic turmoil in Europe has also increased the purchasing of “safe haven” assets like gold.

  • Currency Depreciation

Currency depreciation occurs when a country’s currency loses value in relation to one or more foreign currencies. Inflation and monetary policy are two common causes of currency depreciation.  Inflation is essentially the decrease in purchasing power of a currency.

This provides a direct correlation between currency and gold prices. For example, between 2005 and 2015, the purchasing power of the dollar decreased by nearly 20 percent. During this time, gold prices increased by over 169 percent.

Since gold tends to maintain its value and currency is subject to significant variations, investors protect their portfolios with gold. When a nation’s currency is weak, investors turn to gold, increasing demand, and prices.

Looking to invest in gold? Call us today for a free quote

Photo by Jingming Pan on Unsplash

More To Explore

Lynne A.

left us a 5 star review


Met with Joel to see if the silver and gold coins I found were worth anything. He was very nice and only one coin was worth a few bucks. He suggested just...

Lynne A. September 29, 2023

Joel took time and patiently explained the value of my jewelry and how he calculated it. I believe I got a good, honest deal and I would highly recommend him.

Anne Andrews C. September 28, 2023

I could not have been more pleased and satisfied with Joel at Westlake Gold. If you have spare jewelry and gold that you want to get top dollar for, this is the only place that you need to go. Do not go to downtown LA. Do not go to any jewelry store and especially do not go to a pawn shop! Joel is the only man that you need to see. He is professional, kind, and as sincere and honest as they come. He has a low overhead for his business and he is without question going to give you the best possible price for your valuables. I didn’t even know that some pieces that I had were worth more than I had expected… but Joel being as honest and sincere as they come made sure that I had what I needed and did with a gracious understanding and very friendly demeanor. After leaving this place, I was both impressed and so happy to see that there are still people out there that do care about others. Do not waste your time and go anywhere else… this is the man to see!!!

Steve Benezra September 20, 2023

Very professional and detailed in their evaluation. I felt very comfortable.

Ali Farboud August 9, 2023

The team at Westlake Gold was both kind and professional. Joel is very knowledgeable and fair - and I really enjoyed working with him on the sale of some estate jewelry. I highly recommend!

Dana Barrett July 10, 2023

*Respectful, surprisingly great appraisal, very safe and honest.* Joel meets his customers in a clean and neat office inside of an office building, instead of many others in the area. This allows me to feel more comfortable to start with. He was very respectful, friendly, and courteous. The best part comes with the pricing. This was not my first time releasing old gold and jewelry, and I received way more than I thought I would have given my past experience with other jewelry buyers. Thank you, Joel. Wish I had met you in the past, but sure am happy I do now.

Birgitte Tan June 30, 2023

I was very happy with the transaction and the money that he offered to us when I sold gold jewelry. He was very knowledgeable and kind to me and my...

Mithila U. June 2, 2023

Great experience selling gold silver and jewelry. Joel is very skilled and explains the transaction.

Mike Kale May 19, 2023

What a hidden treasure, pun intended. Overwhelmed with a large collection that I wasn't sure was costume or the real deal. impressed with how each piece was tested even the ones marked for authentication. professional and honest.

janie ahlberg May 14, 2023

If you are looking for an honest appraisal and fair deal, this is the place to go! I walked in with what I thought was seven 1oz Canadian silver dollars worth $25 each, turns out they were 1oz Canadian platinum coins with worth $1,000+ each!! He operated with 100% integrity and patience with me. He took the time to educate me on coins. I will defiantly return!

John Strote May 12, 2023

Highly recommend Westlake Gold. I had a bunch of estate jewelry to liquidate and I feel like I got a very fair price for my items. I definitely will return. Thank you!

Rana Mohr May 12, 2023

I highly recommend Westlake Gold - Joel is very knowledgable about gold and diamonds and I loved his authenticity when giving me the information I needed. He’s very professional, and courteous. I’ll definitely be back in future!

hannah de boisblanc December 16, 2022

Joel, thank you for your help with the silver we brought into your shop. You were very helpful and pleasant to work with.

Robin Johnson December 5, 2022

Just met with Joel while taking care of selling my father's gold (after his passing). Joel was honest, fair, and professional. Highly recommend Westlake Gold.

Cathy Anderson August 2, 2022

I highly recommend Westlake Village Gold! I took my Jewelry to several places,I receive the best price from Joel his customer service, Attention extremely detail. I knew the first few minutes of meeting him that you can trust this man, Definitely will be back.

Rebecca de la Torre September 14, 2020

Joel always provide incredible customer service. Joel is very knowledgeable about gold and diamonds and is also very polite and I always enjoy my conversations with him when trying to sell him gold. I highly recommend working with Westlake Gold.

Patrick rohn September 10, 2020

I bought two rings from Joel and was blown away by the experience. He is extremely honest, professional, and knowledgeable. He normally doesn't make jewelry sales to walk in customers, but just so happened to have exactly what we were looking for. And he even arranged to have our rings resized and polished. They are beautiful and exactly what we wanted.

Stephanie Bland March 30, 2020

Very professional, knowledgeable and honest. More than fair, highly recommend.

Doug Weil January 9, 2020

Joel is great at what he does. He helped me with valuing some coins I needed. If you need to find the value on any jewelry you must go here. Thank you so much for your help!

Probate Services Inc. November 2, 2017

Joel was extremely knowledgable, professional, informative and expeditious in the overall process. I will be coming back if/when I have a need to sell silver, gold and/or jewelry!

Scott O'Malley July 14, 2016