Sunday, October 15, 2017

London losing its mojo as world's primary gold dealer as trading volumes have dropped 12% in past two months

For over 100 years London gold markets have been the primary arbiters of gold prices through their twice daily London Gold Fix.  But with a combination of new Basil III regulations and the choice of the voters for Britain to leave the European Union, nearly all financial markets within the British Isles are feeling the brunt of lost business.

And according to new reports out in London for OTC and derivative paper gold trading, the long-standing center of the gold universe has seen a drop off of more than 12% in just the past two months.

London is losing its Midas touch. 
New rules from regulators, on top of uncertainties over the U.K.’s future relationship with the European Union, are denting the city’s position as the biggest center for gold trading in the world. The changes threaten to push up costs, a key competitive advantage of London’s over-the-counter market. 
Even before the regulations come in, average net daily volume of gold settled by London Precious Metals Clearing Ltd. fell 12 percent in two months to 18.5 million ounces in August. In New York, the British capital’s biggest rival, trading in gold contracts jumped more than 25 percent in the third quarter from the previous three months, with activity during European hours surging 32 percent. – Bloomberg

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