Foundation · Module F3
There is no single gold price. There are several — and every one of them traces back to the same vault.
What you'll learn
Where prices come from
Most retail traders look at a chart and assume "the gold price" is one number.
It isn't. The chart on your platform is one of several related prices, all moving together but set in different places, by different mechanisms, for different purposes. Knowing which one you're looking at — and how it gets made — is the difference between knowing your market and just watching a line.
The price tree
The gold market sits in three layers. At the bottom, physical metal — the thing F1 was about. In the middle, the institutional infrastructure that prices it. At the top, the retail-accessible quotes that everyone with a trading platform watches.
What you trade
XAU/USD on MT4 · GC tick on NinjaTrader · GLD share · Dealer coin price
Retail-accessible — derived from the layer below
Derived from
Where prices are made
LBMA Gold Price auction · COMEX gold futures · Spot OTC interbank market · Bullion bank market-making · ETF physical holdings
Institutional infrastructure — discovers and benchmarks the price
Anchored to
What it's tied to
Miners · Refiners · LBMA-approved vaults · Jewellery and industrial demand · Central bank reserves
The 995 Good Delivery bar — what F1 was about
Prices flow upward. The retail layer derives from the institutional layer, which discovers prices for the physical layer underneath. Every XAU/USD tick on your broker, every GC tick on the exchange, every GLD share price, every dealer coin quote — they all originate in that middle gold band. And the gold band is making markets in the dark band at the bottom.
The rest of this module walks through what each layer actually is — starting with the most important price in the gold market that most retail traders have never heard of.
The benchmark
Twice a day in London — 10:30am and 3:00pm local time — a group of around sixteen LBMA-accredited bullion banks and market participants gather electronically to set the LBMA Gold Price.
This is the institutional benchmark. It's not the most-traded gold price — COMEX futures hold that title by volume — but it's the most institutionally trusted reference. Central bank trades, mining contracts, jewellery industry settlements, ETF redemptions: when these mention "the gold price," they almost always mean this one.
The current system replaced the century-old London Gold Fix on 20 March 2015. The old process was a twice-daily phone call between five bullion banks — and after the FCA fined Barclays £26 million in 2014 for a trader who manipulated the 3:00pm fix to dodge a client payout, and class-action settlements against the Fix banks eventually totalled $152 million, the LBMA moved the benchmark onto an electronic, auditable platform. ICE Benchmark Administration now runs the auction on the LBMA's behalf.
LBMA Gold Price — at a glance
The live tick
Whenever you see "gold" ticking on TradingView, MT4, or NinjaTrader, you are — almost always — looking at the COMEX front-month gold futures price, or a feed derived from it.
The CME Group's COMEX exchange lists gold futures that trade nearly 23 hours a day. The "front-month" contract — the nearest-to-expiry contract with the most volume — is the live tick most retail charting platforms display. Settlement is determined by CME at the close of each session.
This is the price your GC and MGC trades settle against. It's also where the bulk of speculative gold flow lives — hedge funds, CTAs, and managed money trade COMEX gold futures in size every day.
COMEX futures and the LBMA Gold Price are two views of the same market. COMEX is the live, intraday, speculative tick. LBMA is the daily institutional benchmark. They track each other closely — kept in line by arbitrage — but they're different prices, set by different mechanisms, for different audiences.
Two prices, one market
"Spot gold" is the price for immediate physical settlement. "Gold futures" is the price for settlement at a future date. They're different numbers.
In gold, futures normally trade slightly above spot. The difference is called the basis, and it reflects the cost of holding gold versus holding cash — primarily interest rates and storage costs. When futures are higher than spot, the market is in contango. When futures are lower than spot — rare in gold — it's called backwardation, and it usually signals stress in physical supply.
Bullion banks arbitrage the relationship constantly through the EFP (Exchange For Physical) market, which lets institutions swap spot positions for futures positions and vice versa. This arbitrage is what keeps the two prices locked in step.
For a retail trader: XAU/USD spot and front-month GC/MGC futures move together nearly tick for tick. The absolute price levels differ by the basis, but the direction and magnitude of moves is essentially the same. If you're trading one, you're effectively trading the other.
The last mile
Walking the chain backwards from your screen:
Your broker shows you XAU/USD on MetaTrader. That quote came from your broker's liquidity provider — usually a Tier 1 bank or a wholesale aggregator. The liquidity provider takes the spot OTC interbank price — which itself is anchored to the LBMA Gold Price and the COMEX futures market — and provides a wholesale stream to brokers. Your broker takes that wholesale stream, adds a spread, and displays it to you.
Your broker's XAU/USD spread typically runs 0.20 to 0.50 USD per ounce, though the range is wide — ECN-style accounts can be under 0.10, while higher-markup brokers run above 1.00 USD. That spread is the wholesale price plus the markup your broker chooses to apply. There is no single "true" retail XAU/USD price — every broker is quoting you a marked-up version of the wholesale tick, and the markups differ.
GC on the futures side works differently. NinjaTrader, Tradovate, or any other futures broker shows you the live COMEX exchange price directly — there's no markup on the price itself. You pay a commission per contract, but the price ticking on your screen is the actual exchange tick. That's why futures spreads are tighter and pricing is more transparent than CFDs.
Why this matters
The price you trade is never the wholesale price. There is always a cost between you and the market — sometimes as a spread, sometimes as a commission, sometimes as both. On XAU/USD via a CFD broker, the cost is mostly embedded in the spread. On GC via a futures broker, it's a transparent commission per contract on top of the exchange tick. How brokers actually make money on retail flow — and why some advertise spreads tighter than their own wholesale cost — is a bigger story than the spread alone. F5 picks this up.
Carry this into F4