London Spot Fix

The “London spot fix” is the daily price per ounce of precious metals (we’re talking platinum, palladium, and the ever-popular gold and silver). And that’s neat and all, but what’s even neater is how the price is established. Every morning and every afternoon, five reps from each of the London Gold Pool (i.e., the biggest of big dogs in gold bullion) hop on a conference call, chat about the weather, and set the daily prices. Okay, maybe they don’t always chat about the weather. We don’t know; we’re not there. But what we do know is that, as soon as they hang up from that call, the initial precious metal prices per ounce are set.

Does this mean that, once they set the price, that’s it until the next conference call? Not really; the price they establish is just the initial price. Once they release that number into the world, investors come in and do their thing, buying and selling and influencing the price as they’ve always done. Since so many other derivatives are based on the price of gold, for example, these conference calls (which, BTW, are also referred to as the London am and pm fixes, as well as the London morning and afternoon fixes) are eagerly anticipated and watched by precious metalheads around the world.