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LBMA to start reporting OTC gold trade soon; exchange model seen costly

Section: Daily Dispatches

By A. Ananthalakshmi
Thursday, June 25, 2015

SHANGHAI -- The London Bullion Market Association could soon take steps to report trades of the over-the-counter gold market, but the prospect of higher costs makes an exchange-traded model unattractive to participants for now, its chief executive said.

The LBMA had commissioned consultancy EY, formerly known as Ernst & Young, to review the London gold market and recommend further developments including the possibility of creating an exchange for gold trading in the city.

More than $5 trillion worth of gold transactions are made over the counter in London every year. The OTC market, where trades are executed via dealer networks as opposed to a centralized exchange, exceeds the trading of gold futures.

"Our next step following the EY recommendations, certainly trade reporting is going to be a big first one," CEO Ruth Crowell said, ahead of the LBMA Bullion Market Forum to be held here today.

Currently no data is available for the bilateral OTC trades, leading to complaints of lack of transparency in the market. ...

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