London Fixing
London Fixing, also known as the "London Fix," refers to the benchmark exchange rate or commodity price determined at specific times by the London market. This price has a significant impact on global financial markets, especially in forex and precious metals trading. This article will explain the background, scheduling, market impact, and common related questions about London Fixing.
1. What is London Fixing?
London Fixing refers to the benchmark exchange rate or metal price set by the London market, typically published at fixed times each day. In the forex market, this moment is critical for traders and businesses as it provides a reference exchange rate for a given moment. This price is particularly important for banks and financial institutions handling cross-border transactions or foreign currency deposits.
In the precious metals market, especially gold, the London Fixing is determined by the London Bullion Market Association (LBMA) and is one of the most important global gold pricing standards.
Gold Price trend chart provided by TitanFX: You can check at a glance the global gold price trends, and in the top center of the gold price display, you can see the prices announced in the morning and afternoon by London Bullion Market Association (LBMA).
2. London Fixing Times
London Fixing is divided into AM and PM fixings each trading day. The times are subject to adjustments based on the UK’s daylight saving time. Below is the detailed schedule for both winter and summer times:
Standard Time (Winter Time)
| Fix Type | London Time (UTC+0) | Taiwan/Hong Kong/Singapore/Malaysia/Beijing (UTC+8) | Japan (UTC+9) |
|---|---|---|---|
| AM Fix (London AM Fix) | 10:30 AM (every business day) | 6:30 PM (every business day) | 7:30 PM (every business day) |
| PM Fix (London PM Fix) | 3:00 PM (every business day) | 11:00 PM (every business day) | 12:00 AM (every business day) |
Daylight Saving Time (Summer Time)
| Fix Type | London Time (UTC+1) | Taiwan/Hong Kong/Singapore/Malaysia/Beijing (UTC+8) | Japan (UTC+9) |
|---|---|---|---|
| AM Fix (London AM Fix) | 9:30 AM (every business day) | 5:30 PM (every business day) | 6:30 PM (every business day) |
| PM Fix (London PM Fix) | 2:00 PM (every business day) | 10:00 PM (every business day) | 11:00 PM (every business day) |
3. Impact of London Fixing on the Market
The London Fixing has far-reaching effects on global markets, especially in the following areas:
3.1 Impact on Forex Market
London Fixing influences forex market volatility, with price fluctuations often becoming more significant, especially when large corporate payments or capital movements occur. Since many businesses and financial institutions process settlement transactions or adjust funds during this time, market volatility tends to increase. Price movements are usually more intense at month-end or on specific dates like the 5th, 10th, 15th, 20th, 25th, and 30th of each month.
3.2 Impact on Precious Metals Market
In the precious metals market, the London Fixing has a major impact on gold prices. The gold price determined by LBMA at this moment is considered the global reference price. For financial institutions, central banks, and commodity traders, this price helps in making daily trading decisions.
3.3 Impact on Commodity Markets
Apart from forex and precious metals, London Fixing also affects other commodity markets. Due to the high interconnectedness of global financial markets, price fluctuations during London trading hours can spill over to other markets. For example, gold price changes may impact oil markets or other commodities.
4. Frequently Asked Questions
4.1 How does London Fixing impact my forex trading?
London Fixing can affect daily exchange rates, especially when significant capital flows occur, potentially causing sharp market price swings. For forex traders, understanding the influence of London Fixing can help in making timely trading decisions. For those relying on technical analysis, the price at this time can serve as an important reference point.
4.2 Can I only trade during London Fixing?
No, you can trade forex or precious metals at any time. However, since London Fixing has a significant market impact, especially for large financial institutions, trading activity is particularly active during these times. Therefore, for traders looking to profit from a more volatile market, the time surrounding London Fixing can be worth watching.
4.3 Why is London chosen to set this benchmark price?
London, as one of the world’s leading financial centers, has a rich market history and scale. Since the implementation of the Gold Standard in the 19th century, London has been the global hub for precious metal and currency trading. Even after the end of the Gold Standard, London retained its position as the core of financial and precious metals markets, making the London Fixing a fair and transparent global reference price.
5. Conclusion
London Fixing is not only a critical reference point in the forex market but also plays a key role in guiding the prices of global precious metals and other commodities. Understanding the impact of this price is crucial for participants in the financial markets. Whether you're a forex trader or a business, staying informed about the movements of London Fixing can help you make more accurate decisions in volatile markets.
