London Gold Bullion Trading Hits Record High

TURNOVER in London's professional Gold Bullion market – center of the world's wholesale precious metals trade – jumped at a record pace in May to reach a record high by value, trade-body the London Bullion Market Association said this week.

Silver dealing also rose "by double digit percentages" both by volume and value. But "The monthly percentage increases for all three gold measures" – volume, value and number of deals – "were the highest ever recorded" according to the LBMA.

The average daily value of Gold Bullion transferred between London's market-making members jumped 62% from April to reach $29.8 billion – "easily surpassing the previous record of $24.9 billion set in March, 2008."

Bullion analysts agree, however, that the LBMA's figures understate the likely volume of London dealing, because they only capture transfers between the very largest members of the Association.

Allowing for this "netting effect", estimates range from three to five times the LBMA's reported statistics – with the multiple rising as trade increases – and perhaps putting May's Gold Bullion turnover nearer $150 billion per day.

The vast bulk of professional wholesale dealing in London is done unallocated, with the seller owing gold to the buyer on a credit account, typically for forward delivery in the future but also as a delivery-free investment mechanism.

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