Difference between revisions of "Gold & silver"

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(See also: Bullion-banking mechanics and the LBMA)
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{{quote|Banks treat their metal deposits in much the same way as they do deposits denominated in money, as the reserve asset against which they lend additional money to borrowers.|[https://www.bullionstar.com/gold-university/bullion-banking-mechanics#en-2665-3 CPM Group]}}
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Under the LBMA definition, an "unallocated" gold account is one in which the customer merely has a claim on the bullion bank account provider for an amount of gold. The bullion bank in turn has a liability to the customer for the same amount of gold. Importantly, in the LBMA system, the customer is an '''unsecured creditor''' of the bank. Gold trades are settled using the "loco London" mechanism which simply means a quoted price is for a trade which settles using ''unallocated gold'' "delivered" in London, i.e. the trade settles using the London Gold Market system of unallocated gold accounts and clears though the unallocated London Precious Metal Clearing System (LPMCL) clearing system. The standard for the metal that an unallocated balance represents is theoretically defined as ''995 fine gold in London Good Delivery Bar format''. However, nothing is actually delivered under unallocated trading, i.e. there is no physical transfer of anything between the parties to the transaction. The transfer is merely a book entry.
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== Gold ==
 
== Gold ==
 
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Revision as of 11:10, 21 July 2019

Quote.pngBanks treat their metal deposits in much the same way as they do deposits denominated in money, as the reserve asset against which they lend additional money to borrowers.
CPM Group

Under the LBMA definition, an "unallocated" gold account is one in which the customer merely has a claim on the bullion bank account provider for an amount of gold. The bullion bank in turn has a liability to the customer for the same amount of gold. Importantly, in the LBMA system, the customer is an unsecured creditor of the bank. Gold trades are settled using the "loco London" mechanism which simply means a quoted price is for a trade which settles using unallocated gold "delivered" in London, i.e. the trade settles using the London Gold Market system of unallocated gold accounts and clears though the unallocated London Precious Metal Clearing System (LPMCL) clearing system. The standard for the metal that an unallocated balance represents is theoretically defined as 995 fine gold in London Good Delivery Bar format. However, nothing is actually delivered under unallocated trading, i.e. there is no physical transfer of anything between the parties to the transaction. The transfer is merely a book entry.

Gold

Silver

Sites about gold and silver

See also