Glossary
LBMA Gold Price
The benchmark gold price set twice a day in electronic auctions at 10:30 and 15:00 London time, in US dollars per troy ounce, administered by IBA.
The LBMA Gold Price is the main reference price for gold in the London market. It is set twice a day in electronic auctions starting at 10:30 and 15:00 London time and is independently administered by ICE Benchmark Administration (IBA). The auction price is formed in US dollars per troy ounce; prices in pounds and euros are indicative only.
Example
The auction runs in rounds. IBA posts a price, for example 4,000.00, and participants have about 30 seconds to enter or change buy and sell orders. If buying exceeds selling by more than the allowed tolerance, IBA raises the price, say to 4,001.50, and starts a new round. When the imbalance is within tolerance, that price is set, and any remaining imbalance is shared equally among the direct participants.
Why it matters
Contracts, valuations and financial products refer to the LBMA Gold Price, and using it for them requires a licence from IBA. A gold CFD quote is your broker's price, not the LBMA price, so the two can differ at the moment of the auction.