Every bullion dealer quotes against spot, and every buyer watches it. Far fewer people know where the number actually comes from, which is worth understanding because it explains why prices move when they do and why the figure you see can differ slightly between sources.
There is no single official price
Start here, because it surprises people. Gold does not have one authoritative price the way a listed share has a last traded price on a single exchange.
Most gold and silver trades over the counter, meaning directly between banks, refiners, miners and large institutions rather than on a central exchange. The spot price you see is a continuously updated reflection of where that market is trading, drawn from dealer quotes and futures activity, and different data providers can show marginally different numbers at the same instant.
The London benchmark
Alongside continuous trading there is a formal benchmark, and it is set in London.
The LBMA Gold Price is the internationally recognised benchmark for gold delivered in London. It is set twice daily, at 10:30 and 15:00 London time, in US dollars per troy ounce, producing the LBMA Gold Price AM and the LBMA Gold Price PM. Silver is set once daily at 12:00. Platinum is set twice, at 9:45 and 14:00, with palladium following at the conclusion of the platinum auctions.
These benchmarks are administered independently by ICE Benchmark Administration, which operates electronic auctions for spot unallocated metal. Sterling and euro versions are published but are indicative and for settlement only, since price formation happens in US dollars.
The auctions do not run on weekends or UK bank holidays.
Why a benchmark exists at all
Continuous trading is useful for transacting but awkward for contracts. A refiner selling to a fabricator, a miner settling a supply agreement, or a fund valuing its holdings all need a single defensible reference number rather than a figure that changes every second.
The benchmark provides that. It is a transparent, auditable, tradeable auction price that both sides of a contract can point to.
Loco London
The phrase attached to these prices is loco London, meaning metal held in London. This matters more than it sounds.
A price for gold assumes gold somewhere specific, because moving physical metal between locations costs money and takes time. London is the centre of the wholesale physical market, and clearing data represents net transfers of metal physically held there.
This is one reason retail prices in New Zealand differ from the headline figure. Freight, insurance and import all sit between metal in a London vault and metal in a Christchurch showroom.
What a Good Delivery bar is
Wholesale trading operates on standardised bars meeting LBMA Good Delivery specifications, produced by accredited refiners on the Good Delivery List. That accreditation is the internationally recognised standard for refiners producing large bars for institutional trade, and major futures exchanges generally accept Good Delivery bars for physical settlement.
These are large bars, far bigger than anything a retail buyer handles. The relevance to you is indirect but real. The refiner accreditation system is what makes a recognised refiner's name meaningful further down the chain.
Why your price differs from spot
Four layers sit between the benchmark and a retail purchase.
Fabrication. Turning wholesale bars into coins and small bars.
Location. Insured freight from vault to dealer, and import handling.
Currency. Benchmarks are set in US dollars, so a New Zealand price includes the exchange rate at the time of pricing.
Retail. The dealer's costs and margin.
Our guide to the premium over spot covers this in more detail.
Frequently asked questions
Who sets the gold price?
No single body sets a continuous price. Gold trades over the counter globally. A formal benchmark, the LBMA Gold Price, is set twice daily by electronic auction administered by ICE Benchmark Administration.
What time is the gold price set?
The LBMA gold auctions run at 10:30 and 15:00 London time. Silver is set at 12:00, and platinum at 9:45 and 14:00.
Why do different websites show slightly different spot prices?
Because most trading is over the counter rather than on one exchange, data providers draw on different sources and update at different intervals.
What does loco London mean?
Metal held in London. Benchmark prices refer to metal in that location, since moving physical metal between locations has real cost.
Is the spot price what I pay?
No. Spot is a wholesale reference for unfabricated metal. Retail prices add fabrication, freight, currency conversion and dealer margin.
See our pricing
Our pricing updates against spot through the trading day. Browse the range or visit the showroom at 124 Peterborough Street, Christchurch.