LBMA Annual Report 2024
Chairman's Message
We are living through interesting times.
Over the past year, increasing geopolitical tensions and continued diversification of central bank reserves have driven up prices for gold and silver, with gold in particular achieving successive record high prices.
Expected cuts to interest rates are also supportive for prices, although markets may have forgotten what a ‘normal’ level of rates should be, consistent with established inflation targets.
Looking ahead, the result of the US election could very well exacerbate the growing trends of protectionism and regionalisation of the global economy. Investors are increasingly keen to diversify their portfolios while keeping a backstop of stability, and gold is seen as a general ‘right-way risk’, proving itself as a store of value in turbulent times and providing reliable liquidity.
It has become compelling to those in the market that gold merits reclassification as a High-Quality Liquid Asset (HQLA). We may have some way to go before convincing the authorities, but LBMA is committed to supporting market developments and transparency so that those HQLA-like properties are both embedded and visible. Read more in the Financial Markets section of this report.
For the market to continue to thrive, standards must be maintained and continually improved upon. The rise in prices and demand has attracted more legitimate investors – as well as actors whose actions could bring the market into disrepute.
LBMA plays a pivotal role in establishing, maintaining and furthering the standards that effectively safeguard the interests of legitimate market participants. The Good Delivery List remains vital to this work, as feedback from our latest Members survey recognised. Work has started on the next iteration of the Responsible Gold Guidance so please do get involved in that process. Furthermore, the Gold Bar Integrity Database is set to go live in January, bringing much needed improvements to gold’s security, integrity and traceability.
It’s fundamental, now more than ever, for all participants in the market to engage with LBMA as we deliver on these key strategic projects. LBMA’s authority rests solely on the strength and support of its Membership and we need that now, more than ever.
Paul Fisher
Chairman, LBMA