The dimensions of the bars are indicated in millimeters.
Pamp
1 Kilo
Cast Bar
(116 x 51 x 8.67)
Heraeus
500g
Cast Bar
(91.0 x 41 x 7.6)
Perth Mint
10oz
Cast Bar
(47 x 21 x 15)
Argor Heraeus
250g
Cast Bar
(50 x 30.5 x 9)
Metalor
100g
Cast Bar
(116 x 51 x 8.67)
Tanaka
50g
Cast Bar
(116 x 51 x 8.67)
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:
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.
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.
Unlike other commodity exchanges, the London Bullion Market does not operate as a commodities exchange with a clearing house as a central counterparty, but instead operates on an Over-the-Counter (OTC) or principal-to-principal basis. What this means is that buyers and sellers choose each other, and do not necessarily find the best price on an exchange floor purely through price competition among different players. It is important to understand the structure of this market to see the concentration and control that some of the largest banks maintain over it.
BY 2025, THE LONDON OTC GOLD MARKET averagED 45 million ounces of gold traded each day. This equates to 1,430 metric tons of gold changing hands daily in 2024, with a value of APPROX. US$190 billion.
There are eleven market-making firms in the London Bullion Market that provide two-way price quotations during London bullion trading hours. These members are Barclays Bank, Goldman Sachs, Credit Suisse, Deutsche Bank, HSBC, JP Morgan, Merrill Lynch, Mitsui, Société Générale, UBS AG and the Bank of Novia Scotia (Scotia Mocatta).
There are six clearing members of the London Bullion Market (Barclays, Deutsche, HSBC, JPMorgan, Scotiabank and UBS) that together own and operate London Precious Metal Clearing Limited (LPMCL). Note that the two biggest players from a clearing perspective are JP Morgan and HSBC.
There are five banks that are market-making members and responsible for setting the price twice daily. They are Scotiabank, Barclays Bank Plc, Deutsche Bank AG, HSBC Bank USA and Société Générale.
The clearing members maintain secure vaulting facilities, but only three of them have their own vaults (Barclays, HSBC, and JP Morgan). The other clearing members use the services of three security carriers, also LBMA members (Brinks, Malca Amit and ViaMat) and of the Bank of England.
In addition to the clearers, there is the Bank of England, which clears the net gold positions among the clearers each day by making book entry transfers into unallocated accounts in respect of each clearer’s trades. The balances of the clearers at the Bank of England represent their entitlement to the bank’s bullion, and within the rules of the LBMA the clearers can treat it as if it were physical reserve (even though nobody outside the bank ever gets to look at the actual metal itself).
Bearing in mind that global gold mine production is circa 3,600 tons per annum (or 9.8 tons per day), we can see that the volume of gold traded in London every day is 146 times the daily output of the world’s gold mines – and 0.7% of the quantity of gold that ever has been mined.
The LBMA website further states that: “In total there is approximately 9,000 tons of gold held in London vaults, of which about two thirds is stored in the Bank of England.” Well, it appears that those 9,000 tons must change hands every 6 days or so, given a trading volume of 1,430 tons per day … unless, of course, most of the activity in the London Bullion Market has little to do with physical gold.
The April 2013 Memorandum of Understanding (MoU) between the LBMA and HMRC remains the foundational guidance for VAT treatment in the London precious metals market as of 2026. The 2013 MoU, which confirms unallocated metal trades are treated as services (rather than goods) and thus typically outside the scope of UK VAT when exported, is still utilized to define the VAT treatment.
Previous reports revealed that 95% of the trades in the London precious metals market are unallocated metal: “95% of transactions are in unallocated metal: therefore, because they are treated as services, the location of the underlying metal is not relevant.”
So let’s recap what we now know about the London Bullion Market:
It is essential to purchase physical bullion that is Good Delivery or has been manufactured by a refinery accredited by the LBMA because it is a sign of quality recognized globally and it facilitates future liquidity of the metal.
The London Bullion Market is at least 90-95% a paper market, consisting of gold denominated debts issued by over-leveraged bullion banks. Assuming that the 9,000 tons held in London vaults represents 5% of the total London Bullion Market, it means that 175,000 tons of paper gold with no backing whatsoever are currently being held by (mostly) unsuspecting investors. And this is, of course, a low estimate because it assumes that those 9,000 tons have not been re-hypothecated several times. This range already approaches — or exceeds — the total amount of gold ever mined and represents a value in the multi-trillion US dollar range.
Given these figures, a run on the London Bullion Market cannot be excluded under conditions of stress. Investors desiring to hold precious metals for the long term as a crisis protection should carefully consider avoiding reliance on the London Market and on any product involving its financial participants
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.
