The new London Bullion Market Association (LBMA) Gold Price, which replaces the long-used London Gold Fix, will be launched in March, New York-listed Intercontinental Exchange (ICE) and the LBMA have announced.
As outlined by the association in November, ICE Benchmark Administration (IBA) would officially become the administrator of the new pricing mechanism, transitioning to a physically settled, electronic and tradeable auction, with the ability to participate in three currencies – the dollar, euro and pound.
Within the process, aggregated gold bids and offers would be updated in real-time with the imbalance calculated and the price updated every 30 seconds.
IBA would use ICE’s widely distributed front-end, WebICE, as the technology platform to allow direct participants, as well as sponsored clients, to manage their orders in the auction in real-time from their desktops.
IBA president Finbarr Hutcheson said on Tuesday that the company had worked closely with the precious metals industry to further enhance the benchmark.
“We are encouraged by the number of firms who have shown interest in the new, electronic auction. Expanding the number of participants in the auction will increase the transparency and robustness of the data used to calculate the benchmark, giving a better representation of the market price,” he said in a statement.
LBMA CEO Ruth Crowell said she was “delighted” to see a high level of interested participants for the March launch.
“The intention and the interest has been very positive and creates a more diverse pool of participants, which includes Chinese banks. We look forward to having enhanced numbers of participants for day one of the LBMA Gold Price,” she noted.
The LBMA Gold Price would be subject to high regulatory standards and, from April 1, would be regulated by the Financial Conduct Authority, in addition to bringing the benchmark in line with the International Organisation of Securities Commissions Principle.