The original five founding members were: N M Rothschild & Sons; Mocatta & Goldsmid; Samuel Montagu & Co.; Pixley & Abell; and Sharps & Wilkins.
For over 80 years we have been fixing the price of gold providing market users with the opportunity to buy and sell gold at a single quoted price. It also provides a published benchmark price that is widely used as a pricing medium by producers, consumers, investors and central banks.
The fix is carried out twice a day by the 5 members via a dedicated conference call facility.
At the start of each fixing, the Chairman announces an opening price to the other 4 members who relay this price to their customers, and based on orders received from them, instruct their representatives to declare themselves as buyers or sellers at that price. Provided there are both buyers and sellers at that price, members are then asked to state the number of bars they wish to trade.
If at the opening price there are only buyers or only sellers, or if the numbers of bars to be bought or sold does not balance, the price is moved and the same procedure is followed until a balance is achieved. The Chairman then announces that the price is fixed. It should be noted that the Fix is said to balance if the buy amount and the sell amount are within 50 bars of each other. The Fixing will last as long as it is necessary to establish a price that satisfies both buyers and sellers.
Customers may leave orders in advance of the Fixings. Alternatively, they may choose to be kept advised of price changes throughout the Fixing and may alter their orders accordingly at any time until the price is fixed. To ensure that the price is not fixed before the member has had an opportunity to communicate any changes each member has a verbal flag. As long as any flag is raised, the Chairman may not declare the price fixed.