How Gold Is Priced: The LBMA Auction, COMEX Futures and the Spot Price
Key takeaways
- Gold prices form continuously in London, New York and Shanghai; London’s OTC market handles about 70% of global notional volume, per the World Gold Council.
- The LBMA Gold Price is set in electronic auctions at 10:30 and 15:00 London time, run by ICE Benchmark Administration since March 20, 2015.
- A standard COMEX gold futures contract covers 100 troy ounces, so each $1 move in gold changes its value by $100.
No single exchange sets the gold price. It forms continuously across three linked markets: the London over-the-counter market, COMEX futures in New York, and the Shanghai Gold Exchange. The LBMA Gold Price, set in auctions twice a day, is the reference used in contracts, while the “spot price” on a screen is a live quote from the trading in between.
London: where most gold changes hands
The World Gold Council estimates that London’s OTC market accounts for about 70% of global notional gold trading volume, based on 2021 data. London, New York and Shanghai together hold about 90%.
Trading in London is bank to bank and client to bank, with no central exchange. A few terms matter:
- Loco London: the LBMA defines it as an account with a clearing bank backed by metal held in a London vault. It is the default delivery location for gold.
- The unit: prices are quoted in US dollars per fine troy ounce, for gold in Good Delivery bars weighing 350 to 430 troy ounces.
- Spot date: a standard trade settles two business days after the deal (T+2). A Monday trade settles Wednesday.
- Unallocated versus allocated: an unallocated account is a claim on the bank, similar to a deposit. An allocated account holds specific numbered bars. The LBMA says more than 90% of wholesale trading uses unallocated accounts.
The volume is large. LBMA clearing data for July 2026 show a daily average of 15.8 million ounces cleared, worth about $64.5 billion a day, across 6,169 transfers. That is a net figure settled between the banks that run London Precious Metals Clearing Limited, so gross trading is larger.
The LBMA Gold Price auction
The LBMA Gold Price is the benchmark most contracts, central banks and funds reference. ICE Benchmark Administration (IBA) runs it as an electronic auction at 10:30 and 15:00 London time, priced in US dollars.
How a round works, per the LBMA’s FAQ:
- A chairperson sets a starting price in line with current market conditions.
- Participants enter how many ounces they want to buy or sell at that price.
- If buying and selling are too far apart, the price is adjusted and a new round starts.
- When the gap falls within tolerance (up to 10,000 ounces), the auction ends. All volume trades at that price and any leftover imbalance is shared equally among direct participants.
IBA publishes a transparency report for each round showing the price, aggregated volumes and number of participants.
The auction replaced the London Gold Fix, which dated to 1919 and ended on March 19, 2015. The new process launched on March 20, 2015 with six direct participants. That first day, the morning price settled at $1,171.75 and the afternoon price at $1,183.10, according to ICE.
COMEX: the futures market
COMEX, run by CME Group, is where gold futures trade. CME says its benchmark gold contract trades the equivalent of nearly 27 million ounces a day. The World Gold Council notes COMEX has become increasingly important for price discovery, with activity concentrated in the nearest-dated contracts.
Key terms of the standard contract (ticker GC), from CME’s fact card:
| Term | GC gold futures | E-micro gold (MGC) |
|---|---|---|
| Contract size | 100 troy ounces | 10 troy ounces |
| Minimum price move | $0.10 per ounce ($10 per contract) | $0.10 per ounce ($1 per contract) |
| Trading hours | Sunday to Friday, 6:00 p.m. to 5:00 p.m. CT, with a daily break | Same |
| Settlement | Physical delivery | Physical, via certificate |
| Minimum fineness | 995 | 995 |
Most futures are closed out before delivery. What ties New York to London is the exchange for physical (EFP) market, which the WGC describes as very active. Traders use it to swap a futures position for physical metal, so a gap between the two prices draws in arbitrage.
Shanghai and the rest of the day
The Shanghai Gold Exchange, established in 2002, is described by the WGC as the largest purely physical spot exchange in the world. It introduced its own benchmark, the Shanghai Gold price, in 2016. Because Shanghai, London and New York trade in different time zones, the price is effectively discovered around the clock.
What the “spot price” actually is
The spot price is a live quote for gold delivered on the spot date, meaning two business days out in the London convention. It is an indication drawn from continuous trading, not a single official print, which is why two quote sites can differ slightly at the same moment.
Retail buyers do not pay spot. Coins and small bars carry a premium for fabrication and distribution, and dealers buy back below their selling price. The spot price is the reference point, not a transaction price for a one-ounce coin. Producers see the same number converted to their home currency, which we cover in gold priced in Canadian dollars.
The math
Using the September 21, 2026 price of $4,353.31 per ounce reported by USAGOLD:
- One GC futures contract (100 ounces) had a notional value of $435,331.
- A $1 move in gold changes that contract’s value by $100. The minimum tick of $0.10 is $10.
- A 400-ounce Good Delivery bar was worth about $1.74 million (400 times $4,353.31).
Why futures usually trade above spot, with a clearly hypothetical example: if spot is $4,000 and the cost of financing is 4% a year, a contract for delivery in three months would be priced near $4,000 times (1 plus 4% times 0.25), or about $4,040. If the futures price drifts much above that, a trader can buy spot, sell futures and lock in the difference. Real pricing also reflects storage, insurance and gold lending rates, so this simplifies.
What to watch
- IBA transparency reports for each LBMA Gold Price auction, showing volume and participants.
- LBMA monthly clearing data, for London volume and value.
- CME daily volume and open interest in GC futures.
- The CFTC Commitments of Traders report, released weekly, for futures positioning.
Sources
- LBMA: LBMA Gold Price FAQs
- ICE: ICE Benchmark Administration launches LBMA Gold Price (2015)
- LBMA OTC Guide: The Price
- LBMA OTC Guide: Precious Metal Accounts
- LBMA: Clearing Data
- CME Group: Gold Futures and Options fact card
- World Gold Council: The Global Gold Market
- USAGOLD: Daily precious metals market report, September 21, 2026
Frequently asked questions
Who sets the price of gold?
No single body sets it. Gold trades continuously in London’s over-the-counter market, on COMEX futures in New York and on the Shanghai Gold Exchange. The LBMA Gold Price benchmark is set twice daily, at 10:30 and 15:00 London time, in an electronic auction run by ICE Benchmark Administration, where banks match buy and sell orders until they balance.
What is the spot price of gold?
The spot price is a live quote for gold delivered on the spot date, which in the London market is two business days after the trade. It is drawn from continuous trading, not a single official print. Retail buyers pay a premium above spot for coins and small bars, and dealers buy back below their selling price.
How big is a COMEX gold futures contract?
The standard COMEX gold futures contract, ticker GC, covers 100 troy ounces of gold at a minimum 995 fineness and is physically settled. The minimum price move is $0.10 per ounce, or $10 per contract. At $4,353.31 per ounce on September 21, 2026, one contract had a notional value of $435,331.
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Disclaimer
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