The efficiency of the London Gold Fixing: from gold standard to hoarded commodity (1919–1968)
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Date
2025-02-20
Authors
O'Connor, Fergal
Lucey, Brian M.
Journal Title
Journal ISSN
Volume Title
Publisher
Cambridge University Press
Published Version
Abstract
This article presents the newly reconstructed daily gold price from 1919 to 1968 for the world's primary gold market during the London Gold Fixing auction, when gold was the cornerstone of the world's monetary system. We assess whether this market conformed to the Efficient Markets Hypothesis, which posits that prices are unpredictable, or the Adaptive Markets Hypothesis, which posits that a market efficiency will evolve based on changes in the market structure. We find that the Gold Fixing price was inefficient in periods when prices were market-based from 1919 to 1925 and again in the 1930s when private hoarders began to have a significant impact on the market. We find the Gold Fixing was also inefficient during gold standard periods when central bank interventions limited gold's ability to react to new information, despite two episodes where prices rose above the official ceiling.
Description
Keywords
Daily gold price , London market , Market efficiency , Adaptive Markets Hypothesis , Gold fixing , Hoarding
Citation
O’Connor, F. and Lucey, B. M. (2025) 'The efficiency of the London Gold Fixing: from gold standard to hoarded commodity (1919–1968)', Financial History Review, 31(3), pp. 273-303. https://doi.org/10.1017/S0968565024000118