Why Gold Prices Fluctuate Daily — and How They’re Set
How Is the Official Gold Price Fixed?
The London Gold Fixing, overseen by the London Bullion Market Association (LBMA), sets the benchmark gold price twice each business day at 10:30 am and 3:00 pm GMT (with only a single morning fix on Christmas Eve and New Year’s Eve)
During this process, 14 major bullion-trading institutions (including banks like HSBC, Standard Chartered and JP Morgan) participate. Each submits bids and offers based on client orders and their own trading intentions. A proposed price is iteratively adjusted until supply equals demand — then the fix is declared complete.
Though originally designed for London contracts, the fix has become the global benchmark, widely used by dealers, investors and platforms worldwide to price gold bullion and jewellery.
Why Gold Prices Move Every Day
Even though the official “fix” happens twice per day, the live spot price of gold fluctuates constantly — even by the second — on global markets such as London, New York, Tokyo, and others.
Key Drivers Behind Daily Movements:
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Supply & Demand
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Gold supply comes from mining and recycled sources, while demand stems from jewellery, investment, and industrial sectors.
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Seasonal spikes in demand—for example, India’s wedding season in autumn—can push prices higher; conversely, weak jewellery demand or increased recycling can lower prices Bullion Giant.
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Economic & Political Sentiment
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Gold is viewed as a safe-haven asset. During times of geopolitical tension, economic turbulence, or trade uncertainty, demand surges as investors seek to preserve wealth
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For example: escalating trade fears and a weakening US dollar have driven gold to record highs in 2025, while strong central bank buying has also supported demand Financial Times.
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Inflation & Interest Rates
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Gold is widely regarded as an inflation hedge, maintaining value when currencies lose purchasing power.
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Conversely, higher interest rates make yield-bearing assets like bonds more attractive than gold, which pays no yield — reducing its appeal and potentially lowering its price
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Central Bank Activity
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Central banks hold substantial gold reserves and their buying or selling—though often unannounced—can shift market dynamics.
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Historically, LBMA members adhered to agreements limiting sales, but central banks such as those in emerging markets continue to add gold to balance sheets, increasing prices
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“Paper Gold” Instruments (ETFs, Futures)
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Much gold trading is conducted via exchange-traded funds (ETFs) and futures contracts rather than physical delivery. These instruments can drive pricing dynamics separate from physical market fundamentals.
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Because the number of contracts often exceeds actual physical gold available, rapid trading and speculative positioning can amplify price swings.
Each business day’s gold price benchmark is set at fixed times via London’s Gold Fix. In between fixes, the spot price moves continuously based on supply-demand shifts, investor psychology, economic data, and derivatives activity.
As a trusted jewellery provider, understanding this helps explain why a ring that cost £1,800 one hour may cost slightly different the next, even though the gold hasn’t physically changed.
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