Gold price benchmarks: four numbers, one metal
On any given afternoon during the years this archive covers, four different gold price benchmarks could be quoted and all four would be accurate. There was the London benchmark, set by auction and used for settlement. There was the spot price, quoted continuously between dealers. There was a futures price on COMEX, TOCOM, MCX or DGCX, attached to a specific contract and delivery month. And there was a retail price on a jeweller's board in Mumbai or Dubai, which contained the London price plus several charges that have nothing to do with the metal market.
Most confusion in precious-metals reporting comes from moving between these four without saying so. A story that quotes a rupee price and then compares it with a dollar price is comparing a retail number that includes 10 % duty with a wholesale number that does not. A story that says gold “closed” at a figure is usually quoting a futures settlement, which is not the same as the benchmark. The restored dispatches in this archive state which number they are using, and link here.
The LBMA benchmark
The LBMA benchmark, the first of the four gold price benchmarks, is an auction, not a poll and not a committee decision. Participating members submit buy and sell interest at a proposed price, the price is adjusted until the imbalance between the two falls within a tolerance, and the resulting figure is published. It happens twice each London business day, and the afternoon print is the one most contracts specify because it falls inside both European and American trading hours.
This matters for reading the archive because the mechanism changed during the period it covers. The process was reformed and moved onto an electronic platform with a wider participant set and published audit trail, replacing an older telephone-based arrangement. Dispatches from 2011 and 2012 describe the older process; later ones describe the newer. Both are correct for their dates. How gold is priced sets out the auction in detail.
COMEX futures and basis
A futures price is the third of the gold price benchmarks: a price for delivery at a future date, and it differs from spot by the cost of carrying metal until then: financing, storage and insurance, less any lease income. That difference is the basis. In a normal market the further-dated contract trades above spot, and the spread widens with time to delivery.
Each venue's contract is its own instrument with its own size, delivery months, tick value and deliverable specification, so a Tokyo quote and a New York quote are not interchangeable even at the same instant. This is why the archive's most-read reference material was contract mechanics rather than price commentary, and it is set out in full in contract specifications.
| Venue | Location | Quoted in | Role in the archive |
|---|---|---|---|
| LBMA | London | USD / troy oz | The reference price for settlement and valuation |
| COMEX | New York | USD / troy oz | The futures price most often reported as a “close” |
| TOCOM | Tokyo | JPY / gram | Asian-hours pricing; subject of the CME tie-up dispatch |
| MCX | Mumbai | INR / 10 grams | The Indian reference behind most rupee figures here |
| SGE | Shanghai | CNY / gram | Chinese physical premium and the margin-rule dispatches |
| DGCX | Dubai | USD / troy oz | Gulf and India-facing contracts |
Venues as named in the dispatches. Contract sizes and tick values are in contract specifications.
Local prices and premiums
A local physical price is the international price plus whatever it costs to have metal in that place, legally, in the form the buyer wants. In Shanghai during these years that premium was a reasonable proxy for Chinese physical demand, because import was channelled and the premium responded quickly to it. In India the same premium became a policy artefact: as import duty rose from 2 % to 10 % between 2012 and 2013, the gap between the legal landed price and the street price widened enough to fund an entire parallel supply chain.
That is why India needs its own reference page. The sequence of duty rises, the 80:20 export-linked rule, and the smuggling response are set out in India's gold import regime, and the arithmetic of an actual retail quote is worked through in the restored dispatch on how to calculate the Indian price of gold.
The five years in one line
The shape below is the period this archive covers, reconstructed from the settlements the dispatches quote. It is an indicative shape and not a trading series: the points are quarterly, the source is a news archive rather than a price feed, and the two marked extremes are the opening level and the low of the period.
Units, purity and weight
Almost every arithmetic error in precious-metals reporting is a unit error, so the conversions are worth stating once. Gold is quoted internationally in troy ounces of 31.1035 grams, not the 28.35-gram ounce used for everything else, a difference of nearly 10 %. India quotes retail gold per ten grams, China per gram, and both convert from the dollar-per-ounce price at the prevailing exchange rate before any local charge is added.
Purity is the second variable. The London benchmark refers to metal of at least 995 fineness in the accepted good-delivery form. Indian retail is quoted separately for 24-carat (999.9) and 22-carat (916) gold, and a great many published comparisons quietly compare one country's 22-carat retail price with another's 24-carat wholesale one. Where a dispatch in this archive quotes a rupee figure, the restored page states the purity it applied to, because the archive's own copy usually did.
| Unit | Equals | Used for |
|---|---|---|
| 1 troy ounce | 31.1035 g | International wholesale quotes |
| 1 kilogram | 32.1507 troy oz | Bar weights, silver quotes |
| 1 tonne | 32,150.7 troy oz | Production, reserves, fund holdings |
| 10 grams | 0.3215 troy oz | Indian retail quotes |
| 1 tola | 11.6638 g | South Asian and Gulf retail, historically |
| 1 carat (gems) | 0.2 g | Diamond production and stone weight |
Note that the carat used for gemstone weight and the karat used for gold purity are unrelated measures that share a name: a 22-karat statement is about fineness, a 22-carat statement about a stone is about mass.
Where to check this
This page is current writing, so its mechanisms can be checked against the bodies that publish them. Figures inside the restored dispatches stay as filed.
- LBMA The reference price, and the auction that establishes it twice each London business day.
- World Gold Council Gold Demand Trends, the quarterly series that splits demand into jewellery, investment, central banks and technology, which are the four categories the hubs use.
Common questions
Which gold price is “the” gold price?
For settlement and valuation purposes, the LBMA Gold Price, the figure established by auction in London twice each business day. It is the reference most contracts, funds and central banks mark against. But a screen quote from a futures exchange is a different number for a different delivery date, and a jeweller's board in Mumbai is a third number including duty and charges. None of them is wrong; they are answers to different questions.
Why is gold priced per troy ounce rather than per gram?
Historical convention that never changed, because too much infrastructure depends on it. A troy ounce is 31.1035 grams, heavier than the avoirdupois ounce used for groceries, which is 28.35 grams. Confusing the two produces a 9 % error, which is why bullion documentation always specifies “troy”. India and China quote in grams and taels respectively for retail, and convert.
What does “spot” actually mean if the benchmark is only set twice a day?
Spot is the continuous over-the-counter price for immediate delivery, quoted between dealers all day. The benchmark auction is a scheduled event that produces a single printed number suitable for contracts and valuations. Spot moves constantly; the benchmark is a fixed point. Most reporting uses them interchangeably, which is usually harmless and occasionally misleading.
Are the price figures in this archive usable as data?
As dated observations, yes: each one is a figure that was published on a stated day, and the restored dispatch says which venue and which contract it refers to. As a series, no: this is a news archive, not a price database, and the arc on this page is explicitly reconstructed from quoted settlements and labelled as an indicative shape rather than a trading series.