The Intercontinental Exchange Benchmark Administration has been selected to be the announcer of the daily price of gold products such as gold bullion. The announcement was made by the London Bullion Market Association this month, and the new method of reporting will see an electronic system replacing the antiquated system that has been in place since the year 1919.

The implementation of the new system and new administrator will take place in the first three months of 2015. It follows the reform of the platinum, palladium and silver valuations this year, which were also awarded to global companies. The London Metal Exchange (a subsidiary of Hong Kong Exchanges and Clearing Ltd.) now handles the platinum and palladium price values the world over, and the CME Group Inc. – alongside Thomson Reuters Corp. – now manages the price of silver through an electronic system similar to that being implemented for the gold bullion market.

The daily gold price is a global benchmark that affects the perceived price of gold the world over. The value ascribed to gold is highly important for many companies on the chain of gold production, sales and investment, from the gold bullion mining companies, to exchange-traded funds, to gold bullion sales companies.

The current system currently works through London Gold Market Fixing Ltd., which presently features a consortium of four banks (the Bank of Novia Scotia-Scotia Mocatta, Barclays Bank plc, HSBC Bank USA and Société Générale SA). These four banking authorities have two conference calls a day which determine at what value gold is to be set at.

The new system will feature a computer algorithm which will calculate the value of gold, before presenting this gold standard on an electronic platform. It will be set to show a new value at 10.30am and 3pm every single day (London time zone).  11 groups will provide the necessary data for the calculation of the price of gold, making it more accurate than the previous system.

Gold is still in high demand, with the total demand for gold being $184 billion in 2013. The popularity of purchasing gold bullion looks unlikely to decrease as the perception of the precious metal as a “secure” purchasing option continues to prevail.

The ICE Benchmark Administration won the privilege of managing the gold price values over 4 other firms. The organisation was established in 2013 to provide better oversight over the values of precious metals and other trading materials.  Its main aim is to provide a credible source of information and a reliable solution to present banking sector issues.