Gold fix
Gold fix
Understanding 'Gold Fix' in Trading
In the realm of trading, understanding key terms like 'Gold Fix' is imperative. A little vague? Let's break it down.
What is Gold Fix?
The Gold Fix refers to a benchmark used in trading that sets the price for gold. The determination of this price takes place twice daily in the London Bullion market by 'The London Gold Market Fixing Ltd'. This international procedure ensures a single, globally accepted price point for each troy ounce of gold.
The Importance of Gold Fix
The essence of the gold fix is rooted in its standardizing effect on gold trade. As it sets a unified price globally, it prevents discrepancies across different international markets. This price uniformity sustains market balance, promotes fair trading, and reduces potential risk associated with price fluctuations.
How Does the Gold Fix Work?
We've established that the gold fix is essential, but how does it operate? The Fixing happens in two daily sessions conducted by telephone - the first at 10:30 AM (the morning fix) and the second at 3:00 PM (the afternoon fix), London time. During these sessions, the member banks of The London Gold Market Fixing Ltd equate the supply and demand for gold, which decides the fixing price.
Why Is It Important in Trading?
In trading, the gold fix has a significant impact. It provides a reference point for those participating in gold trading - producers, consumers, investors, and speculators. These stakeholders rely on this benchmark to value their assets, as well as to plan and execute their trading strategies.
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