INTRODUCTION TO GOLD MARKET (2^ PART)
Sunday, 10 July 2011 17:47
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Fixing
The members participate with orders on behalf of its clients but also with orders on their own. The price thus defined, is published by the major financial media and is considered the reference price by all traders in the world. And 'possible to know the London gold fixing at www.lbma.org.uk. The gold 'fixing' is in the hands of four 'market makers': Bank of Nova Scotia (ScotiaMocatta), Deutsche Bank AG, HSBC Bank USA (London Branch), Societe Generale. The client passes an order to 'market makers' must also pay a commission for orders executed. The 'market makers' earn these commissions, but also by how they handle purchase orders and sales in their portfolios (for example, can buy just what interests them, or buy only a part of their requirements, or sell short). In practice not only the perpetrators of the orders of their customers, but actual traders looking to get their profit by buying at lower prices and selling at higher prices. The term 'fixing' has spread to other markets such as the exchange rate and how all financial transactions in the various world stock exchanges.
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One consequence of the fact that the gold market is a OTC market is the fixing. This is a mechanism for defining the price, designed to allow traders around the world to buy and sell at fair prices. Twice daily (morning and afternoon), the London gold fixing members make a private auction to determine the price of gold by buying and selling orders in their possession.
