The price of gold mainly comes from the London gold market, which implements a daily pricing system and is priced twice a day in the morning and afternoon. London gold price is also the spot gold price, which is the most important gold price in the world. The gold market price in many countries and regions is based on the London gold price, and then adjusted appropriately according to their respective supply and demand conditions.

What is the pricing mechanism of spot gold price?

The pricing mechanism of spot gold price began on 19 19 September 12, when nm Rothschild & Sons, the largest gold company in Britain, was in the trading hall. The company is the chief representative, and the other four major gold merchants have one representative each. These five parties set the gold price in the London gold market twice a day at 10:30 am and 03:00 pm respectively.

At the beginning of pricing, trading activities in the market will be suspended, and all gold merchants will not quote. The chief representative will set an appropriate opening price according to the price of the New York gold market after the London market closed the day before and the price of the Hong Kong gold market that morning. The other four representatives will report the opening price to their respective trading rooms and then tell the customers, and then announce whether to buy or sell at this price according to the orders received.

If the quantity of buying and selling is unbalanced, the chief representative will adjust the price and repeat the above process until it is balanced, and the final price will be set as the transaction price of spot gold trading. After the end of the pricing transaction, the normal gold trading quotation activities will be resumed, and the gold markets of other countries will adjust their respective gold prices based on this pricing.

Before 2004, the four major gold merchants except Lochiel & Sons were Deutsche Bank, HSBC, Credit Suisse First Boston Bank and scotiabank.

At present, the top five pricing banks are BarclaysBankPlc, scotiabank, DeutscheBankAG, HSBCBankUSANA and SociétéGénérale.

The five major pricing gold traders represent gold traders all over the world, including gold suppliers, gold demanders and investors. Under the pricing mechanism, the price setting is the most reasonable price for buyers and sellers in the market, and the whole pricing process is open and fair. Therefore, gold pricing in London is the most important gold price indicator in the world.