The London Bullion Market Association (LBMA) recently launched the Global Precious Metals Code as a stand-alone guide for the wholesale precious metals market.
Dealers of gold coins in London among others could use the new code for best practices involving transactions in the market. LBMA Chairman Paul Fisher said that the new guidelines would help in fostering consistency, greater trust, and better transparency in the market.
The Global Precious Metals Code forms part of three separate codes for the Fixed Income, Currency and Commodities markets, following the Fair and Effective Markets Review’s assessment on how to improve trading in these markets.
LBMA’s Precious Metals Code Working Group helped in determining the different aspects of the new code, which substituted the bullion annex of the Non-Investment Products Code. The association expected the new guidelines to align with Bank for International Settlements’ FX Global Code.
Aside from being a new guide, the code marks progress for the bullion industry ever since gold-futures trading began in London in 1676, according to the LBMA.
In May, LBMA noted that the average prices of gold amounted to $1,245 per ounce — down by 1.6% month over month. In terms of volume, the average ounces of gold also dropped 4.8% to 20.8 million. The figure reflected a 6.4% decline in commodity value, which amounted to $25.8 billion.
Fewer gold commodities also changed hands during the month, which is down by 11.9% to a total of 2,696. However, the clearer settled on average 7,697 ounces per transfer, an increase of 8% compared to April’s figures.
The history of bullion trading has gone a long way over the past 350 years particularly for gold commodities. The LBMA’s new stand-alone code of practice will help in further developing trading activities within the precious metals market.