Price Fixing

As with any commodity traded on open markets, the price of gold depends solely on supply and demand. However, this is not quite true. Since the end of 1919, the price of gold has been fixed formally by the most important gold traders in London. As of 1968, price fixing occurs daily at 3pm GMT, which is the start of business for the US stock market. Obviously, many different factors, such as the actions of central banks and gold mining companies, can lead to significant deviations from the fixed price.

Basically, this gold fixing leads to a valuation of gold in US dollars, which is consequently strongly influenced by the exchange rate and the oil price. The gold price corresponds to the monetary amount in dollars per ounce of gold.