What’s the difference between the London and New York gold and silver prices?

Investors who are new to the gold and silver market may become confused about the difference between London and New York precious metal spot prices. Some dealers have been known to use differing spot prices to confuse potential customers, but explaining London precious metals prices in comparison to New York gold and silver spot prices is relatively simple.

London Gold & Silver Prices

The London “gold fix” is set twice each trading day. Members of the London Gold Market Fixing Ltd. meet via dedicated telephone line to set spot prices at 10:30am and 3:00pm, respectively. Price setting representatives must be members of the London Bullion Market Association (LBMA). The current representatives are:

ScotiaMocatta — successor to Mocatta & Goldsmid and part of Bank of Nova Scotia

Barclays Capital — Replaced N.M. Rothschild & Sons

Deutsche Bank — Owner of Sharps Pixley

HSBC — Owner of Samuel Montagu & Co.

The London gold fix serves the purpose of settling contracts between members of the London bullion market, and it also serves as a benchmark for the rest of the world’s gold markets. Gold prices are set in United States Dollars, British Pounds and European Euros. London precious metal prices were set once a day until 1968 when a second price setting was introduced in correlation with the opening of US commodities markets.

The banks review their buy, sell and limit orders and investigate how many investors (x) would be willing to invest a set amount of currency (y) for a certain amount of precious metals (z). The complete algorithm is much more complicated but this is the basic process by which the twice-daily price markers are set.

New York Gold & Silver Prices

New York gold prices listed on the COMEX are set based on New York Mercantile Exchange (NYMEX) regulations as follows (COMEX is a subsidiary division of NYMEX):

Live precious metal spot prices represent the prices of the most active futures contracts trading at the moment. The New York spot price for gold and silver is calculated using the most active nearby month. At the end of each trading day the closing daily bid for that month’s futures contract is set as the closing spot price. The COMEX division of NYMEX ceases trading at 1:30pm EST.

Markets like Hong Kong and Sydney set gold prices, too, but the vast majority of the world seems to prefer the London and New York indicators. Live New York gold and silver prices and charts are always available on our Gold Silver Prices page. It can be quite difficult to buy gold directly from COMEX due to investment minimums that are far out of the range of the average American investor and subject to strict government regulation. Large-volume discount dealers like Gold Silver allow household investors to receive the same discounts as the banks and institutions that buy gold, and since 1992 we have given individuals the option to purchase privately held precious metals. If you are ready to learn more about the gold and silver market please request your free copy of Real Money Magazine below or call our tax-free order desk now at 1-800-394-3337.

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