The fix runs as an electronic auction among accredited participants until buy and sell interest balance, replacing the telephone process that ran from 1919 to 2015. The resulting price is published and referenced in an enormous number of contracts.
Because so much business settles at the fix, it attracts the same concerns as a futures settlement-price: participants have been fined for trading ahead of it, and its replacement with a transparent auction was a direct response to those scandals.
Example: a fund holding 500,000 ounces marks its book at the afternoon fix. A fix of $2,398.50 against $2,402.00 in the futures market is a $1.75 million difference in reported value on the same metal.
Related: gc, settlement-price, banging-the-close, silver-futures, troy-ounce