LBMA review to consider creation of London gold trading exchange

27-Apr (Reuters) – The London Bullion Market Association has commissioned consultancy EY to review the London gold market and recommend further developments, it said on Monday, including the possibility of creating an exchange for gold trading in the city.

The study by EY, formerly known as Ernst&Young, will look into a range of options to benefit the bullion market within the remit of enhancing liquidity and transparency, the LBMA said.

It would “consider the current structure of the market, and whether it’s possible to move from an over-the-counter market as we have got at the moment, to other options such as an exchange,” a spokesman for the LBMA said. “But that is likely to be a longer term development.”

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PG View: As gold and control of the market moves East, I think London is desperate to hold on to some vestige of its former command. However, the momentum has clearly swung toward Asia at this point. Additionally, after all the troubles associated with the London fix and rigging of the FX and Libor markets, trust may have been lost for good.