In this feature, LBMA publishes responses to frequently asked questions received from Members and other stakeholders. This is one of the many ways in which we are striving to be transparent in our goal to advance standards and develop market solutions.

If you have any questions on any of our initiatives, publications, events or strategic direction, please email

Here are the responses to queries we have had recently:

1) Why isn’t inflation driving the gold price higher?

While gold has strong cultural and historical value as an inflation hedge, its price tends to react to the actions of central banks and governments as they try to deal with inflation, rather than responding directly to inflation itself. The main tool being used by the US Federal Reserve and other monetary authorities to combat inflation this year has been higher interest rates, and because owning gold pays no income, that in turn creates a headwind for bullion prices as the opportunity cost of holding the metal increases relative to cash in the bank or buying higher-yield bonds.

2) What is fuelling the increase in silver buying demand from India, and how is this impacting the wider market?

This year will see over 7,000 MT of silver go to India. The Indian market needs to replenish stocks due to regular drawdowns by jewellers and industrial users over the last two years. Concentrated demand in recent months has seen silver imports being made by air instead of cheaper sea freight, such is the urgency of the restocking ahead of seasonal buying.

3) Why are some exchange traded commodities seeing lower volumes?

Increased volatility leads to increased margin requirements which, in turn, often leads to lower trading volumes and subsequently liquidity. In some markets, recent events have of course increased initial and variation margins but also concentration risk add ons. For many entities these increases mean that they are no longer willing to maintain volumes in trade flows and in particular hedging trades.

4) Can gold play a positive role in the Liquidity Driven Investments (LDI) strategy?

In October the BOE intervened in the gilt market following the so-called mini budget as pension funds were forced to increase their cash collateral towards their LDI derivative contracts. Typically, an emergency cash raising of this kind would mean other assets being sold rapidly. The best asset to choose would be the one that had an inverse price correlation and was also the most liquid. Gold would have fulfilled those criteria.

5) How is the outflow of gold and especially silver from London stockpiles affecting liquidity in the market?

As part of the bullion market's commitment to transparency, LBMA now freely publishes monthly vault holding data for the gold and silver being cared for by the London custodians. It also publishes post-trade volume data for all deals struck by its trading members (disseminated by Nasdaq and available via the Bloomberg Terminal and Refinitiv Eikon).

While the former data set shows a sharp outflow of silver from London storage across the last 12 months, the latter shows that the volume of silver ounces being traded has actually risen on a daily basis.

Period Silver (moz) vault holdings Silver (moz) daily trade Gold (moz) vault holdings Gold (moz) daily trade
Q4 2021 1,164 264 311 27
Q1 2022 1,127 312 310 31
Q2 2022 1,033 284 310 26
Q3 2022 913 315 307 32

Bid-ask spreads in London silver also remain unremarkable according to market participants, again suggesting good depth and liquidity in wholesale silver bullion trading.

For gold, the smaller net outflow of bullion from London storage has in fact been led by lower quantities stored for central banks and other authorities at the Bank of England, with the quantity held by the market's six commercial custodians actually rising so far in 2022.

As with silver, bid/ask spreads in gold remain tight and consistent with typical levels. The gold forward curve – derived from the LBMA trade data – also shows that, while funding costs for market participants have of course risen as global interest rates rise against the backdrop of strong inflation worldwide, leasing rates for borrowed gold in the London market have remained very stable, with the implied lease-rate curve virtually unchanged in autumn 2022 from the same point last year.

6) What does the Responsibility and Sustainability Principles Declaration mean in practice for the market?

The Declaration of Responsibility and Sustainability Principles formally expresses a shared commitment to operating in a responsible and sustainable way, based on a clear set of shared goals.

As part of the commitment to the declaration, signatories agreed to closer collaboration and reporting on progress in the implementation of these principles. They will also be able to demonstrate their commitment through adherence to initiatives that are designed for specific activities within the supply chain, such as the World Gold Council’s Responsible Gold Mining Principles and the LBMA’s Responsible Gold Guidance. Find out more here.

7) And what does the ASM initiative mean for the market?

The initiative aims to help advance the responsible sourcing practices for ASM, and direct market access for those who depend on ASM gold for their livelihood.

It is imperative for stakeholders across the value chain to come together to take action to integrate ASM into the global responsible gold value chain. In order to support this work, LBMA will set up an ASM Task Force (with membership comprising Good Delivery List refiners, representatives from Large Scale Mines (LSM) and the World Gold Council (WGC), Responsible Mineral Initiative (RMI) and civil society). Once clear proposals have been agreed by the ASM Task Force, this will be launched for public consultation for additional feedback. You can find out more here. Look out for further updates on this crucial work.

8) When will the videos of the Conference sessions be available to watch?

Videos from the Conference sessions are now available on the Conference microsite ( for those who registered for the event. The videos will also be uploaded to the main LBMA website in the next month or so – stay tuned for further updates.

9) Can I sign up to next year’s Conference?

Yes, registration is now open for the next LBMA/LPPM Global Precious Metals Conference in Barcelona, Spain on Sunday 15 – Tuesday 17 October, 2023. You can get your ticket here.

Tickets are also available for the next Assaying and Refining Conference, taking place on Sunday 12 - Wednesday 15 March, in London. You can find out more and get your ticket on the event microsite.