2020 Annual Review
As the world continues to face up to the challenges of COVID-19, LBMA has, and continues, to liaise closely with key stakeholders to ensure that the Loco London market continues to operate efficiently and effectively during what has been a highly unprecedented 2020. We can report that the market has not only remained open for business, but has also been very active, with all-time highs reported for market volumes and metal stocks. On July 29, trading volumes for gold hit a record high, with 89.36 million ounces (moz) changing hands with a total value of $174.3 billion. By comparison, the average daily gold trading during Q3 2020 was 36.3moz, with an average value of $69.53 billion.
Gold has maintained and continues to demonstrate its centuries old role as a safe haven and store of value in troubled times.
KEEPING MEMBERS AND THE MARKET INFORMED
In tandem with our popular weekly newsletters, in March, we launched a weekly series of webinars, including some from the Responsible Sourcing & Technology Summit, to keep Members and the wider market connected and up to date with key issues impacting all sectors of the global precious metals industry. LBMA will continue to deliver on its role as an information hub and offer its support as the voice and champion of the Loco London market.
In light of the developments in recent months, there has never been a better case for the industry to explore further efficiencies. The advancement of global standards continues to be a key focus for LBMA, as well as ensuring that technology plays an integral role in making the settlement of precious metals more efficient and transparent. You can read more about these specific initiatives in the Regulatory Report on pages 8-11 of this Review.
In a move towards greater transparency, on 1 September, the London commercial vaults, together with the Bank of England, announced that they would be moving to publishing vault data with a one month lag rather than the three-month lag. This is a highly significant achievement, delivering greater transparency and more timely insight into the amount of gold and silver held in the London vaults. Gold stocks are at an all-time record high, with more than 9,000 tonnes of gold and in excess of 33,000 tonnes of silver. These stocks underpin what is the biggest precious metals market in the world. They provide an important insight into London’s durability and reinforce the underlying strength of the physical over the-counter (OTC) Market. The value of gold and silver in London vaults is in excess of $550 billion and $25 billion respectively.
LBMA Trade Data makes it possible for market participants to gauge the size and shape of the Loco London precious metals market, the oldest and biggest financial market for gold in the world. On average, around $64 billion of gold is traded each day.
TRADE REPORTING – LIQUIDITY AND COMPARISON VS OTHER ASSET CLASSES
Gold Global Average Daily Volume: $139.25 billion
The Trade Data reports help to compare the size of the gold market in particular with other liquid assets. The latest data for the major asset classes shows that the size of the global gold market is similar in value to the US Treasury Bill market by average daily volume.
Average Daily Volume of Major Asset Classes in $ Billion (YTD)