Today on March 20, 2015 a new era for gold pricing begins with a first Gold price set at $1,171.75 per ounce denominated in U.S. dollars. The London Gold Fix was replace by LBMA Gold price that will be administered and estimated by ICE Benchmark Administration. LBMA UK website listed all the changes and new features that investors and market participants need to know about.

“The new IBA platform provides and electronic, auction based, tradeable, auditable and full IOSCO-compliant solution for the London bullion market”, says the LBMA website. The new system will be able to show real-time aggregated and anonymous bids and offers for precise and detailed pricing. The fix however will set every day at the same time: 10:30 am and 3:00 pm.

Also LBMA clearly identifies the auction process and how it works: “The chairperson sets the starting price and the price for each round based on publicly available procedures. Participants then enter their buy and sell orders by volume (i.e. number of ounces). The price discovery process is in US Dollars but participants may, if they wish, request to settle in different currencies. If the net volume of all participants fall within the pre-determined tolerance at the end of a round (i.e. the imbalance currently set at 20,000 oz.), the auction will be complete, with all volume tradeable at that price. Netting of orders is processed automatically for participants with all house and client orders, plus any share of the imbalance, contributing to their final net volume. This net volume is then matched against other participants to produce trades with immediate trade confirmations.”

The benchmark further on April 1, 2015 will be given status “specified” to comply with regulation for Financial Services and Markets.