A WORD ON THE LONDON BULLION MARKET … AND WHY THE WISE INVESTOR SHOULD STAY AWAY FROM IT
Anyone even remotely interested in gold or silver often encounters the name of the London Bullion Market Association (LBMA). The LBMA is an international trade association that represents the wholesale market for gold and silver bullion, and it has two main roles:
1. It governs the London bullion market, where most of the world’s physical gold trades. The London market is the focus of the over the counter (OTC) market for physical bullion, with a client base that includes producers, refiners, fabricators, and the majority of the world’s central banks.
2. The association sets the industry standards in terms of manufacturing, assaying, and vaulting of the gold in the London market. The LBMA publishes a list of accredited refiners (called the Good Delivery List) whose standards of production and assaying meet the requirements set out in the LBMA’s rules. Bars produced by such refiners and conforming to size and purity standards are called Good Delivery bars. Only bullion conforming to these standards is acceptable in settlement against transactions conducted between participants in the bullion market.