London's $5 trillion gold hub getting ready for a major overhaul

By Eddie Van Der Walt
Bloomberg News
Wednesday, April 6, 2016

There's a competition brewing to figure out how the world's largest gold-trading hub can get bigger and better.

Much of the $5 trillion in transactions cleared every year in London is done by telephone or in electronic chat rooms and are the same kind of one-on-one deals that gave birth to the marketplace three centuries ago. But traders and bankers say the system may not provide enough transparency to satisfy regulators or attract new business at a time when more gold is being bought and sold in New York and Shanghai.

That's why the main participant group, the London Bullion Market Association, is evaluating bids to create a trading and reporting platform. At the same time a different plan is being developed by the World Gold Council, a mining industry group that is working with the London Metal Exchange to come up with new futures contracts, said two people with direct knowledge of the venture. The proposals, if successful, would alter the way gold is bought and sold in the city.

"It's a pretty big moment for London, and it's time to choose," said Mark O'Byrne, a director in Dublin at brokerage GoldCore Ltd. "Everybody wants to bring more players to the table, but there is a risk that through the failure to work together, liquidity is diluted and the market weakened." ...

... For the remainder of the report:

http://www.bloomberg.com/news/articles/2016-04-06/gold-market-hub-set-fo...