The London Bullion Market Association (LBMA) Benchmark
The global gold price is anchored by the LBMA Gold Price, an electronic auction run twice each London business day — at 10:30 AM and 3:00 PM GMT — by ICE Benchmark Administration (IBA) on behalf of the London Bullion Market Association. The process replaced the historic "Gold Fix" phone call in 2015 with a transparent, auditable electronic platform.
During each auction, participating banks and market makers submit buy and sell orders in 1,000-troy-ounce lots. The algorithm iterates the price until buy and sell orders are within a defined imbalance threshold — typically five percent — at which point the price is published as the benchmark. This price is then used worldwide as the settlement reference for gold contracts, derivatives, and physical transactions.
Between the two daily LBMA fixings, the gold spot price fluctuates continuously in the over-the-counter (OTC) market. Major trading hubs in London, New York, Zurich, Shanghai, and Dubai operate nearly around the clock, creating a 24-hour price discovery process. The price you see on Serafa reflects the current live OTC spot price, not just the most recent fixing.
Spot Price vs. the Price You Pay
The spot price is the wholesale cost of one troy ounce of investment-grade gold (minimum 99.5% fine) for immediate delivery between professional market participants. The price consumers pay at a jeweler, a mint, or an exchange differs from spot because of several compounding premiums:
- Fabrication premium: The cost of refining, casting, or minting gold into bars, coins, or jewelry — typically 1–5% over spot for bullion, rising to 10–30% for numismatic or decorative pieces.
- Dealer margin: Retailers mark up their cost to cover operating expenses and profit. Online bullion dealers typically charge 1–3%; retail jewelers often 50–200%.
- Purity discount: Gold below 24K contains alloy metals. A 22K piece is 91.67% gold; its intrinsic gold value equals the spot price multiplied by 0.9167.
- Import duties and VAT: Many countries levy taxes on gold imports and sales. India, for example, charges 15% import duty on gold bars.
Serafa displays the pure spot price, which reflects the commodity market value. It is the correct starting point for calculating intrinsic gold value in any weight or purity.
What Moves the Gold Price?
Gold is uniquely positioned at the intersection of commodity, currency, and financial asset. Six primary drivers shape its price over different time horizons:
| Factor | Price Effect | Mechanism |
|---|---|---|
| US Dollar Strength | Inverse | Gold is priced in USD globally. When the dollar rises, gold becomes more expensive for international buyers, reducing demand and pushing the price down. A weaker dollar does the opposite. |
| Real Interest Rates | Inverse | Gold pays no yield. When real interest rates (nominal rates minus inflation) are high, yield-bearing assets become more attractive, reducing gold's appeal. Near-zero or negative real rates historically drive gold rallies. |
| Inflation | Positive | Gold has served as an inflation hedge for millennia. When the purchasing power of fiat currencies erodes, investors buy gold to preserve wealth, driving prices higher. |
| Central Bank Buying | Positive | Central banks collectively hold thousands of tonnes of gold as reserve assets. Large net purchases — particularly by emerging-market central banks — reduce global supply and lift prices. |
| Geopolitical Risk | Positive | Wars, sanctions, banking crises, and political instability trigger 'safe haven' flows. Investors move capital from equities and currencies into gold, a pattern observed in every major crisis since World War II. |
| Mining Supply | Inverse | New mine production adds roughly 3,500–3,800 tonnes to supply annually. Disruptions from labour strikes, flooding, or resource depletion tighten supply and support prices over the medium term. |
How Prices Are Converted to Local Currencies
The international gold market quotes prices exclusively in US dollars (USD) per troy ounce. To convert this to your local currency, Serafa applies the mid-market reference exchange rate for the USD/[Currency] pair. The calculation is:
Local Price per gram = (Local Price per oz) ÷ 31.1035
Local Price per tola = (Local Price per oz) ÷ 2.6667
Foreign exchange rates themselves fluctuate continuously. Serafa uses mid-market FX rates as reference data that refreshes periodically through the trading day — on a slower cadence than the gold spot feed, not tick-by-tick like it. So a gold price quoted in Saudi Riyals can still change even when the USD spot price is unchanged — due to an update in the USD/SAR exchange rate.
How Serafa Calculates the Prices You See
Serafa sources live metal prices from Gold-API, a specialist provider that aggregates near-real-time precious-metals spot prices. Our data pipeline:
- Source: Spot prices are ingested from the Gold-API feed, which tracks the global over-the-counter (OTC) gold spot price.
- Validation: Outlier prices are filtered using a tolerance check against the recent rolling average to eliminate erroneous ticks.
- Currency conversion: The validated USD spot price is multiplied by the current mid-market FX rate for each of the 170+ currencies Serafa supports.
- Unit conversion: Prices are computed per troy ounce, gram, kilogram, and tola simultaneously using exact conversion factors (1 troy oz = 31.10348 g exactly; 1 tola = 11.66380 g).
- Purity adjustment: For the price calculator, per-gram prices are multiplied by the purity factor of the selected karat (e.g., 22K = 0.9167, 18K = 0.75).
- Delivery: Prices are pushed to clients via Server-Sent Events (SSE) in near-real-time — typically refreshed within about 10 seconds during active market hours.
Frequently Asked Questions
What is the gold spot price?
The gold spot price is the current market price for one troy ounce of pure (24K) gold for immediate delivery. It is determined continuously by global over-the-counter (OTC) trading between banks, dealers, miners, and institutional investors. The LBMA publishes a reference price twice daily, but the spot price fluctuates second-by-second between those fixings.
Why does the gold price change every day — sometimes every minute?
Gold trades on a 24-hour global market. Its price responds in real time to changes in the US dollar, interest rate expectations, inflation data, geopolitical events, central bank announcements, and shifts in investor sentiment. Even when stock markets are closed, gold continues to trade in Asia, the Middle East, and Europe, meaning prices can move significantly overnight.
What is the difference between the gold spot price and the price I pay at a jeweler?
The spot price is the wholesale commodity price for refined gold bullion. Jewelers add fabrication costs (casting, finishing), retail markup, and sometimes import duties on top. A 22K bracelet may retail at 30–70% above the raw metal value. For investment-grade coins and bars from reputable mints, the premium is much lower — typically 2–5% above spot.
How often does Serafa update its gold prices?
Serafa pushes live price updates via Server-Sent Events (SSE) in near-real-time — typically refreshed within about 10 seconds during active market hours. The live metal feed is provided by Gold-API. Our data pipeline validates each price tick against a recent rolling average to filter erroneous outliers before broadcasting to clients. The FX rates used for currency conversion are reference data that refresh on a slower cadence. Historical data points used in charts are archived at daily and weekly intervals.
What currency is the gold price quoted in globally?
Gold is universally priced in US dollars (USD) per troy ounce on international markets. Serafa converts this USD price to local currencies using mid-market reference exchange rates, which refresh periodically through the trading day (on a slower cadence than the live metal feed). This means the gold price in, for example, Saudi Riyals can change even if the USD spot price stays flat — purely due to USD/SAR movements.
Is the gold price the same everywhere in the world?
The underlying USD spot price is the same globally — it is a single, unified market. However, the price consumers pay varies by country due to import duties, value-added tax (VAT), local dealer premiums, and currency exchange rates. India, for example, levies a 15% import duty on gold bars, which structurally lifts the domestic price above the international spot equivalent.