Over the past year, rising geopolitical tensions and the continued diversification of central bank reserves have driven gold and silver prices higher, with gold in particular reaching successive record prices.
Expected interest rate cuts are also positive for prices, although markets may have forgotten what a "normal" level of rates should be, consistent with stated inflation targets.
Looking ahead, the outcome of the US election could well exacerbate the growing trends of protectionism and regionalization in the global economy. Investors are increasingly interested in diversifying their portfolios while maintaining a backing of stability, and gold is seen as a general "risk on track", proving to be a store of value in turbulent times and providing reliable liquidity.
For market participants, it has been convincing that gold deserves to be reclassified as a high quality liquid asset (HQLA). There may still be a long way to go before the authorities are convinced, but the LBMA is committed to supporting market developments and transparency so that these HQLA-like properties are embedded and visible. Read more in the Financial Markets section of this report.
For the market to continue to thrive, standards must be maintained and continually improved. Rising prices and demand have attracted more legitimate investors, as well as players whose actions could bring the market into disrepute.
The LBMA plays a critical role in establishing, maintaining and promoting standards that effectively safeguard the interests of legitimate market participants. The Good Delivery Practices List continues to be vital to this work, as recognized by feedback from our latest member survey. Work has begun on the next version of the Responsible Gold Guide, so we ask you to participate in that process. In addition, the Gold Bullion Integrity Database will go live in January, bringing much-needed improvements to gold safety, integrity and traceability.
Now more than ever it is critical that all market participants engage with the LBMA as we move forward on these key strategic projects. The LBMA's authority rests solely on the strength and support of its members and we need them now more than ever.
Paul Fisher
President of the LBMA
https://www.lbma.org.uk/publications/lbma-annual-report-2024