The London market issues a “fix” price twice per day for gold, and once per day for silver. These fix prices are a benchmark used by institutions, producers, and other large market participants to price contracts and settle large buy and sell orders. Refineries and mining companies also use them to value inventories.
The gold fix price is established in London at 10:30am (4:30am eastern standard time) and 3pm (9am EST) on all trading days. The silver fix price is established once per day at noon (6am EST). The fix process is done electronically, and normally takes 10-15 minutes, though it can take 30 minutes or longer during extreme market conditions.
The process is essentially an auction method. The fix price is set once the gross amount of buy orders matches the gross amount of sell orders among all participating banks. This assures that all large orders will be executed at a common price.
The fixing process has been ongoing since 1919. It occurs in London because for many years it was home to most wholesale gold transactions in the world. London is still considered one of the primary gold marketplaces.
As is evident, the gold and silver fix prices are not designed for the general public. They are used to conduct wholesale orders, and dealers will not normally open an account for a private investor. Most investors could not trade at this level anyway; settlement conditions are a “good delivery” bar, generally 400 ounces in size.