London Silver Fix
The "London Silver Fix" was a historical process by which the price of silver was determined through a daily auction in London. It was used as a benchmark for setting the prevailing price of silver in the global market. Similar to the London Gold Fix, the London Silver Fix played a significant role in silver pricing and trading for many years, although it has undergone changes and evolved over time.
Historical background
The London Silver Fix was established in the mid-19th century when representatives from prominent London silver dealers, known as "fixing members," would meet daily at a designated location to set the daily silver price. These firms included banking and trading houses, such as Deutsche Bank, HSBC, and ScotiaMocatta.
Fixing process
The fixing process typically occurred once a day, usually in the morning. During the fixing session, the representatives would discuss and agree on the silver price that would clear the outstanding buy and sell orders from their clients.
Transparency and consensus
Similar to the London Gold Fix, the London Silver Fix was known for its transparency and consensus-based approach. The representatives would adjust the price incrementally until they reached a point where buy and sell orders balanced, at which point the "fixing price" would be set.
Benchmark role
The London Silver Fix served as a benchmark for silver pricing worldwide. It was used as a reference point for determining the value of silver in various financial transactions, contracts, and industries, including the jewelry and electronics sectors.
Evolution and transition
Over time, the London Silver Fix underwent changes to enhance transparency and compliance with evolving regulatory standards. In 2014, the traditional fixing process was replaced by a more transparent electronic auction system known as the "LBMA Silver Price."
LBMA Silver Price
The LBMA Silver Price, administered by the London Bullion Market Association (LBMA), is the modern successor to the London Silver Fix. It continues to provide a widely recognized and transparent benchmark for silver pricing. It operates electronically, with prices determined through a daily auction process.
It's important to note that the London Silver Fix and its successor, the LBMA Silver Price, remain significant in the global silver market. They are key reference points used for silver pricing in various financial markets and industries. However, silver pricing can also be influenced by supply and demand dynamics, currency movements, geopolitical events, and other factors.
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