Market Standards

Loco London Precious Metals Market

In the Loco London Market, trade is carried out directly between two counterparties, without the involvement of an exchange – enabling transactions to precisely meet a client’s requirements. LBMA is at the heart of this market.

How the Market Works

Governed by LBMA and running 24 hours a day through London, the London Bullion Market – as it’s known to its members – provides flexibility in pricing, size of deals and length of contract. It also maintains confidentiality and ensures that all risks exist only between the two counterparties.

Counterparties and their clients from all over the world settle their transactions through the market, with the bullion settling physically across accounts held in London. The term Loco London simply refers to gold and silver bullion that is physically held in London vaults to underpin the trading activity in this market.

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Transcript

Only gold and silver bars, known as bullion, conforming to our standards, are acceptable in the market. We maintain the Good Delivery List of refiners whose standards of production and assaying meet our requirements.

The five market elements

All bullion transactions between the clearing members of the LBMA are cleared and settled on a net basis electronically by London Precious Metals Clearing Limited.

Seven LBMA members and the Bank of England provide secure locations for bullion and act as gatekeepers to the London market.

Only bullion produced by refiners whose practices and bars meet the stringent standards required to appear on LBMA’s Good Delivery Lists can be traded in the London market.

LBMA’s gold, silver, platinum and palladium prices are recognised as global benchmarks. To aid transparency, we publish monthly vault and clearing data on gold and silver as well as offering a comprehensive view of the market through our LBMA Trade Data .

Most bullion trading and settlement in London uses unallocated accounts – customers do not own specific bars but have a general entitlement to an amount of metal. An allocated account is opened when the customer requires ownership of specific bars.