The London Gold Market – too fragmented?

Will the London Gold Market Self Destruct?

• London Gold Market has been unchallenged for nearly 100 years
• So opaque that quotes of its $5 trillion size are estimates
• Five new offerings are set to appear in the market in the next six months
• Increased fragmentation set to reduce liquidity
• A share of gold price discovery is ripe to be taken by China
• Disruption in the London Gold Market gives opportunity to the East to take more control of the market.

As markets go the London Gold Market has to be one of the oldest and most unchallenged markets there is. With its roots in the 17th century it has been through a series of makeovers but for much of the last century the OTC market has hardly changed.

But now it is having an identity crisis. In the last year we have seen a barrage of news about changes that are coming, and the last few weeks seem to have been busier than ever.

For some the $5 trillion London Gold Market is under serious threat and there are a number of reasons as to why including regulation, gold price discovery and a lack of transparency all items that have haunted players in the London gold market.

Now, the threats that face it are driving many to address these problems and attempt to disrupt the market. We take a quick look at the new offerings set to arrive in the coming months, and ask if they will weaken, rather than strengthen, the London Gold Market and thereby open up an opportunity for China. Read full story here….