Chairman’s Message

The past year has seen a huge amount of activity by LBMA, as we continue to deliver against our strategic objectives.

The LBMA Board had to act following the Russian invasion of Ukraine, and the consequent international sanctions placed upon Russia and Russian entities. As a result, the right thing for LBMA to do was apply its rules which require the recognition of international sanctions. We also acted consistently with ensuring the integrity of the Loco London market.

As usual, global events have been affecting the gold price both upwards and downwards. Interest rates are much higher than in 2021 and rising in most of the world, following the rise in inflation globally. Although that may help to explain why the gold price has fallen from its record high after the invasion of Ukraine earlier in the year, the metal has been proving its worth as a liquid asset in periods of stress.

I suspect that higher inflation – and interest rates – are set to remain with us for quite some time, and there may be further episodes of market stress. Current inflation rates are remarkably similar across the US, the EU and the UK, and have risen above target in Japan and Switzerland, underlining the common nature of the inflationary shocks. Whatever one’s explanations of the cause, controlling inflation expectations to support lower inflationary outcomes could prove to be difficult.