Figure of the month: 939

News Arnulf Hinkel, financial journalist – 02.01.2019

Every Tuesday since 20 November 2018, the London Bullion Market Association LBMA has been publishing its members’ weekly turnover on the London gold market in order to meet regulatory demand for greater transparency in OTC trading. As commodity experts had already assumed, London is by far the largest gold market in Europe. However, said experts had misjudged the daily volumes traded. They had expected significantly less turnover than was actually made.

Gold worth US$37 billion changes hands every day

On average, 939 tonnes of gold are traded daily in London by LBMA members who participated in the survey. And that is only part of the picture, as it does not include trading volumes of gold traders who are not members of the LBMA or do not wish to report their turnover. According to Reuters, spot trading accounts for the lion's share, equalling 62.88 per cent of daily trading volume of some US$37 billion, while 30.8 per cent is traded in the form of swaps and forwards. Options make for a further 2.71 per cent of the gold traded daily, and the share of lending transactions is 3.6 per cent.

London only second by global comparison

As impressive as the daily gold turnover in London seems, there is indeed a gold market that sports an even higher trading volume: on average, 1062.5 tonnes of gold are traded daily on the New York futures market COMEX. The extent to which New York and London dominate the entire gold market as trading centres appears even more impressive when compared with the third- and fourth-largest gold markets: According to the German information website Goldreporter, around 80.7 tonnes of gold change hands daily on the Shanghai Futures Exchange, while the Shanghai Gold Exchange reports an average daily trading volume of 46.7 tonnes.

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