One of the largest and most influential of the gold-market organizations, is the LBMA, London Bullion Market Association.  While often thought of as an exchange, the LBMA is actually a trade association with over 120 regular members representing more than 20 countries.  The LBMA represents the wholesale gold market and supports the development of the London bullion market.   Since its founding in 1987, the LBMA has included members who are central banks, producers, refiners, fabricators and other traders.

Membership in the LBMA is somewhat restricted, requiring support and recommendations from at least three current members.  Membership fees are not excessively expensive, requiring a new member to pay slightly over $4,000 to join and over $10,000 in annual dues.   Membership does convey a wide variety of benefits, including the right to participate in LBMA planning, training, professional, and social activities.

Most LBMA supported trading is for “loco London” gold.  “Loco London” originally meant that the gold was located in or would be shipped to London for delivery to the buyer.  As the London market influence spread internationally, the term grew to include the London-based clearing accounts (loco London accounts) that international traders use to support their buy and sell activities.

These loco London clearing accounts use the unallocated LBMA gold accounts maintained by LBMA members for the settlement of mutual trades as well as transfers to and from third parties.  This clearing system reduces the costs and security risks incurred in the physical movement of gold.

Anytime a precious commodity like gold is exchanged, a major concern is to protect the credibility of the market by insuring the quality of the commodity.   An internationally recognized standard of quality is LBMA’s “London Good Delivery” system.  The London Good Delivery System can be described as having three major components:

1. LBMA Gold Physical standards - This system defines the standard physical properties of the gold traded by LBMA members.  
• Fineness (purity): 995.0 parts per thousand fine gold or better
• Size: Approximate recommended dimensions:
o Top – 255mm x 81 mm
o Bottom – 236 mm x 57 mm
o Thickness – 37 mm
• Weight: 350-430 troy ounce bars (for a variety of technical reasons, it is difficult to produce bars of exact weight… hence the range of acceptable weight)
• Marks on the London Good Delivery gold bar:
o Serial number
o Assay stamp of refiner
o Fineness (to four significant figures)
o Year of manufacture (expressed in four digits)

2. Certified “LMBA Good Delivery List” processors – Gold processors who meet stringent test and inspection standards, are placed on the approved list.  These processors must have a time in business of at least five years, a net worth of at least £10 million, and undergo a series of quality tests.

3. Post-production standards and controls - The quality and consistency of the gold traded through LBMA is assured by means of the “Chain of Integrity”.  The “Chain of Integrity” is a series of controls, standards, and tests instituted and enforced by the LBMA, that gives the LBMA gold buyer, a high level of confidence in the quality of the physical metal that is purchased and delivered.

The London Bullion Market Association plays a major role in standardizing the gold marketing process and providing a credible, efficient base for sales and handling of gold.

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
Open your GoldMoney holding and enjoy complete ownership of the metal you buy.
You will hold and own the allocated metal in your name, in contrast to ETFs and certificates.
Goldmoney always maintain a one-to-one ratio of metal in their vault and in their database. Visit  http://www.goldbuzzer.com/ to Buy Gold Bullion

Click here to find out more about buy gold bullion