What is the LBMA, and what does it stand for?
The LBMA stands for the London Bullion Market Association, and it’s an independent trade association that furthers the transparency and standards of the gold bullion market.
The LBMA awards only the best-quality bullion refiners accreditation and confirms that standards are met.
The IBA (ICE Benchmark Administration) is the administrator for the LBMA Gold Price and the LBMA Silver Price and operates the gold and silver auctions that underlie these benchmarks. The IBA independently administers the price and provides the auction platform on which the LBMA gold price is calculated, while LBMA owns the intellectual property rights. The platform is electronic, tradeable, auditable, and in line with the IOSCO Principles for Financial Benchmarks. Any party using the LBMA Gold Price for valuation and pricing activities, transactions, or financial products requires a usage license from IBA.
IBA ensures appropriate governance over the IBA Precious Metals Auctions and the LBMA Gold Price Benchmark, as well as ensuring standards of conduct are met. All participants are required to adhere to a Code of Conduct, and the IBA’s Precious Metals Oversight Committee, which has broad representation from the gold and silver markets, oversees the definition and methodology of LBMA Precious Metals Prices. For more details on the auction process and oversight,
There are fifteen direct participants who have been onboarded to contribute to the LBMA gold price.
The IBA gold auction: how does it work?
The IBA gold auction sets the international price for gold, particularly the gold that’s delivered in London, England. At the time, four banks would send representatives to the Bank of England twice a day in order to run an auction. It worked like that for about 100 years until some of these banks moved to Canary Wharf. At this time, they decided to start running phone call auctions.
In 2015, IBA took over the auction and moved it to an electronic system where buyers and sellers could come together. The system can run an auction in 30 seconds and compile 10 years’ worth of data in 3 weeks. The results will be the benchmark for the entire gold market.
At Instant Gold Refining in Vancouver, Canada, we buy and sell gold, silver, and all precious metals. Including mining gold or placer gold as well as scrap metals. Contact us for more information about all your precious metals needs.