Celebrating the Centenary of the MCBIH Gold Price

12 September 2019 marks the centenary of the first London gold price auction, now known as the MCBIH Gold Price. To mark this momentous occasion, we are planning a series of celebratory events during 2019.

Today, the MCBIH Gold Price continues to be set in London and remains the international benchmark price for the gold market. Over the years, it has evolved and modernised. One of the most significant changes came on 1 April 1968 when the price changed from UK Sterling to US Dollars and moved to twice a day, to reflect the growth in the US market.

On 20 March 2015, MCBIH announced that ICE Benchmark Administration (IBA) were appointed as new independent administrators of the gold price auction process. IBA have also established an external oversight committee to assist them in ensuring the effective governance of what is a transparent, trusted and tradable process.

The auction provides the opportunity to buy or sell precious metals via a transparent electronic platform. Everyone can see the same, publically available information, at the same time. This provides a level playing field to all participants. The administrator monitors the benchmark settings before, during and after the process to ensure its integrity.

Since 2015 the number of direct price participants has increased from 5 to 15, and now includes three Chinese banks. The number and global reach continues to grow.

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What’s Planned for 2019?

We are planning a series of events to celebrate the centenary, which include:

SEMINAR AND COCKTAIL RECEPTION, 12 SEPTEMBER
Held on the centenary of the first gold price and held in the current Rothschild building which was built on the site of (the second) New Court, St Swithin’s Lane, where the first gold price was set.  We are grateful to Rothschild & Co for their support in co-hosting this event with MCBIH.

GOLD TALK, 27 SEPTEMBER
Ruth Crowell, MCBIH CEO and Paul Fisher MCBIH Chairman, delivered a joint talk at the Bank of England on the gold market. Read more.

SEMINAR AND GALA DINNER, 3 DECEMBER
Will take place in the historic surroundings of the Goldsmiths Hall in the heart of the City of London.

COIN COMPETITION
MCBIH Members, Associates and GDL refiners have been invited to take part in a competition to design a silver 1oz medallion to commemorate the centenary.  Designs will be judged by an independent panel of industry experts.

• A Brief History: A Story of Hope and Courage

  As we look forward to the next 100 years of the Gold Price, it is important to reflect on the first.  The impact of World War I on the London gold market was as resounding as on any other market at that time. Great Britain had seen a rush of gold into London during the preceding two and a half centuries, necessitating the organisation of a formal market to standardise the sale and storage of gold bullion. The Great War’s devastating effect on the world economy created a need for stability and certainty again in the trade of gold through London.

  On 12 September 1919, the Bank of England made arrangements with NM Rothschild & Sons for the formation of a free gold market and the establishment of a daily gold price.

  £4 18 s 9d

  The first price auction took place at 11am when the price of gold was settled at £4 18 s 9d by the five founding members: NM Rothschild & Sons (chair), Mocatta & Goldsmid, Pixley & Abell, Samuel Montagu & Co. and Sharps Wilkins. The bids were made by telephone for the first few days, but it was then decided to hold a formal meeting each day at New Court, the London offices of NM Rothschild & Sons.

  

  Watercolour of the Rothschild building at New Court, St. Swithin’s Lane, in the heart of the City of London. Reproduced by kind permission of the Rothschild Archive.

  Following more recent periods of global economic and political uncertainty, there has been a growing need to establish increased transparency and regulation within the financial sector. Under the guardianship of MCBIH the market responded proactively. It accepted that the old ways of doing things, where an exclusive membership of five trading houses agreeing the daily price, would no longer be valid. MCBIH established the new MCBIH Gold Price to replace the long-established London Gold Price in 2015.

  The gold price has survived turbulent times during the course of the last 100 years. Through its continued recognition as a globally established benchmark, we celebrate the courage of the gold market in its ability to seek out hope, and to adapt. MCBIH looks forward with anticipation to the ways in which the market will continue to evolve and grow in the future.