London Bullion Market Association
Many times when customers are reading about the various gold bars that are offered by Veldt Gold they will come across a phrase “certified good delivery” but will not know exactly what that means.
The London Bullion Market Association (LBMA) is the largest network for gold trading in the world and is loosely overseen by the Bank of England. The LBMA conducts “over-the-counter” (OTC) trades in both gold and silver and its members include banks, bullion dealers, and refiners.
The LBMA publishes a Good Delivery list for approved refineries. In order to meet these requirements, refineries must comply with several standards in order remain on the list; these include having a serial number on the item, weight, purity, and makers hallmark to name a few. Refiners that are on the good delivery list from the LBMA must also submit to random to sampling in order to make sure they are continuing to manufacture their gold and silver bars to LBMA standards.
Like Major League Baseball, the LBMA enlists referees to make sure the standards for Good Delivery are met. There are also two good delivery lists, one for gold bars and the other for silver bars. Bullion bars not certified by the LBMA are still traded however, the good delivery certification only serves to streamline bullion delivery on the institutional level.
Even though most physical gold and silver trades are distributed globally the bulk of the OTC trades that make the bullion market occur through the LBMA. On an average day the London Bullion Market Association can move over 18.3 million ounces of gold and 107 million ounces of silver. This means that daily trade volume is around $15 billion. Volume wise, the LBMA can clear the annual production of gold and silver in under a week. This has led to accusations and calls for oversight from the Gold Anti-Trust Action Committee (GATA) which claims the LBMA’s “clearing data substantially understates the true amount of gold traded”.
Controversy aside, when buying gold bars that have been certified “good delivery” by the LBMA you are buying from refineries that are held to the highest standards in gold and silver bullion assay standards. The “good delivery” is there for large institutions and even central banks to be able to buy gold without having to assay every time a purchase is made.
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