The main elements needed for trading are detailed below. They include definitions relevant to contracts, standard documentation as well as current and future value dates.

In response to our members' needs and those of wider market participants, we can provide access to our own documents as well as those made publicly available by other organisations.

Currency unit

For gold the general market convention is to quote in US $ per ounce. Quotations in other currencies are available upon negotiation. In addition to a US Dollar price, the LBMA Gold Price is settled in US dollars. £ and € prices are also available but these are indicative prices for settlement only.

For silver the general market convention is to quote in US cents per ounce. As for gold quotations in other currencies, these are available upon negotiation. In addition to a price in US cents, £ and € prices are also available but these are indicative prices for settlement only.


Fine Gold Content

This represents the actual quantity of gold in a bar. For example a good delivery bar may have a gross weight (which includes small quantities of impurities) of 403.775 ounces. If it were of a fineness of say 996.4 fine, the fine gold content or net weight of gold would be 403.775 x 0.9964 = 402.321 fine ounces.


Forwards

This may take the form of a simple purchase or sale of metal for settlement beyond spot, an outright forward, or for forward swap transactions. Forward swaps are a simultaneous purchase and sale where one leg of the transaction is generally for spot value and the other forward, conducted at an agreed differential to the spot leg of the deal. They are in effect collateralised loans of metal. This leads to the terms "borrowing on the swap", in the case where the spot is purchased and the forward sold, or "lending on the swap" where the spot is sold and the forward purchased, in order to differentiate from leasing metal.


Leases

Gold and silver may be placed on deposit, borrowed or lent, like currency with interest calculated on the basis of troy ounces of gold or silver. It is uncollateralised lending. In order to differentiate and to avoid confusion with forward swaps, this activity is termed “leasing”. Firms therefore “lend on the lease” or “borrow on the lease”.


Loco London Spot Price

This is the basis for virtually all transactions in gold and silver in London. It is a quotation made by dealers based on US dollars per fine ounce for gold and US dollars per ounce for silver. Settlement and delivery for both metals is two business days in London after the day of the deal.

Dealers can therefore offer material of varying fineness, bar size or form - for example, grain - at premiums to cover the costs of producing smaller, exact weight bars, or bars of a fineness above the minimum 995 fine.


Marketable Amounts

The standard dealing amounts between market makers in the spot market are 5,000 fine ounces in gold and 100,000 ounces in silver. The usual minimum size of transaction is 2,000 troy ounces for gold and 50,000 troy ounces for silver while dealers are willing to offer competitive prices for much larger volumes for clients.

In the forward market, subject to credit limits, London's market makers quote for at least 50,000 fine ounces for gold swaps versus US dollars, and for at least one million ounces of silver.


Other Bullion Bars

In addition to Good Delivery bars, a variety of smaller exact weight bars are available to wholesale clients. The fine gold content of exact weight bars determines their price as clients only pay for the fine gold content (and not for the small amount of impurities which may be present). A kilo bar, for example, weighs one kilogram, which is 32.1507465 ounces. If the fineness of the bar was 995.6 then the fine gold content would be 32.009 ounces. Silver kilo bars are purchased and sold as one kilo of 999 fine silver.


Bar Weights and Their Agreed Fine Gold Content in Troy Ounces:

Gross weight

995.0 assay

999.0 assay

999.9 assays

1 kilo 31.990 32.119 32.148
½ kilo 15.995 16.059 16.074
¼ kilo 7.997 8.030 8.037
200 grams 6.398 6.424 6.430
100 grams 3.199 3.212 3.215
50 grams 1.599 1.606 1.607
20 grams 0.640 0.642 0.643
10 grams 0.320 0.321 0.321
5 grams 0.160 0.161 0.161
100 ounces 99.500 99.900 99.990
50 ounces 49.750 49.950 49.995
25 ounces 24.875 24.975 24.998
10 ounces 9.950 9.990 9.999
5 ounces 4.975 4.995 5.000
1 ounce 0.995 0.999 1.000
10 tolas 3.731 3.746 3.750
5 taels 5.987 6.011 6.017

Quoting Conventions

Prices are expressed in US dollars per fine troy ounce for gold and US cents per troy ounce for silver. Prices against other currencies or in units of weight other than troy ounces are generally available on request.


Settlement and Delivery

The basis for settlement of the loco London quotation is delivery of a standard London Good Delivery bar at the London vault nominated by the dealer who made the sale.

While currency settlement or payment for a transaction will generally be in US dollars over a dollar account in New York, delivery of metal against transactions in gold and silver are in practice made in a number of ways. These include physical delivery at the vault of the dealer or elsewhere, by credit to an "allocated account" or through the London clearing process to the "unallocated account" of any third party.

In addition to delivery at its own vault, a dealer may, by agreement, arrange delivery of physical metal to any destination around the world. Many dealers maintain consignment stocks of physical bullion around the world to facilitate efficient and speedy delivery in active bullion centres.


Spot and Forward Value Dates

Settlement and delivery for spot transactions is two good business days after the day of the deal (a good business day is defined as one in which banks are open in London for delivery of the gold or silver and in New York for settlement of dollars).

The value dates for standard forward quotations are at calendar monthly intervals from spot. Should that day be a non-business day, the value will be for the nearest good business day except at month ends when the value date will be kept in the month which reflects the number of months being quoted for.


Trading Unit

For gold, this is one fine troy ounce, and for silver, one troy ounce. In the case of gold, the unit represents pure gold irrespective of the purity of a particular bar, whereas for silver it represents one ounce of material of which a minimum of 999 parts in every 1,000 will be silver. Fineness is a measure of the proportion of gold or silver in a bullion bar and is expressed in terms of the fine metal content in parts per 1,000, and as such it defines the purity of a gold or silver bar. Assaying is the process by which fineness is determined.


Troy Ounce

The traditional unit of weight used for precious metals. The term derives from the French town of Troyes, where this unit was first used in the Middle Ages. One troy ounce is equal to 1.0971428 ounces avoirdupois. In the bullion market, all references to ounces mean troy ounces. One kilogram is equal to 32.1507465 fine troy ounces. A typical gold bar weighs approximately 400 fine troy ounces, so it would weigh approximately 12.44 kg, ie 400/32.1507465.


Unit for Delivery of Loco London Gold

This is the London Good Delivery gold bar. To meet the required standard it must satisfy certain criteria. It must have a minimum fineness of 995.0 and a gold content of between 350 and 430 fine ounces with the bar weight expressed in multiples of 0.025 of an ounce - the smallest weight used in the market. Bars are generally close to 400 ounces or approximately 12.5 kilograms.


Unit for Delivery of Loco London Silver

This is the London Good Delivery silver bar. To meet the required standard it must satisfy certain criteria. It must have a minimum fineness of 999 and a recommended weight between 750 and 1,100 ounces, although bars between 500 and 1,250 ounces will be accepted. Bars generally weigh around 1,000 ounces. Both gold and silver bars must conform to the specifications for Good Delivery set by the LBMA. Further information available in the Good Delivery section.

Given the variety of products provided by members of the market, and in order to avoid the problems inherent in a multiplicity of bilateral agreements to cover the transactions involved, the LBMA, and where appropriate assisted by LPMCL, has developed and introduced a number of standard agreements. These cover the terms and conditions for operating allocated and unallocated accounts as well as forward, option and gold interest rate derivative transactions.

The major advantage of standard documentation is that it defines market practice. Its utilisation by Members of the LBMA avoids the need to continually check the terms involved in bilateral agreements, and its broad acceptance also provides comfort to clients of the market. By its nature it sets standards for the terms under which transactions are conducted and so provides confidence to users of market products.

The following standard documentation is currently available:

The 1994 International Bullion Master Agreement (IBMA)
This is an agreement which gives a common set of terms reflecting best market practice for spot and forward bullion transactions and options, providing for the closing out and netting of outstanding bullion transactions between the parties in the event of default by one of them. As such, it is a single-product netting agreement. It is in a form that may be executed between the parties or, if not executed and one party is acting through an office in the UK, will be presumed to apply if no other bilateral documentation has been signed between the parties.

Copies of the IBMA may be obtained in print format only from the LBMA – this publication is not available electronically. There is a charge if you are not an LBMA member. Please contact the LBMA if you are interested in obtaining a copy.

The 1997 ISDA Bullion Definitions
The LBMA co-operated with the International Swaps and Derivatives Association to produce these definitions. They are designed to incorporate bullion transactions within the netting provisions of business conducted under an ISDA Master Agreement. They enable bullion transactions to be incorporated into the cross-product netting of the broad range of products traded between international institutions. Where parties are signatories to ISDA, the terms of the 1997 Bullion Definitions may be applied by being incorporated into the confirmations of each transaction.

Standard Forms of Confirmation for IRS and FRA Transactions
These were also developed in conjunction with ISDA and represent stand-alone agreements or confirmations that bring these derivative products under the provisions of the 1992 ISDA Master Agreement.

The ISDA Bullion Definitions and the Standard Forms of Confirmation for IRS and FRA transactions are not available from the LBMA. Further information available on the ISDA website .

Value Dates 2017

Delivery of a currency and metal is effected on the "spot date" for the first leg of the spot or forward transaction. Excluding bank holidays, it means that a trade entered into on a Monday will settle on a Wednesday and a trade entered into on a Friday will settle on the following Tuesday. Forward transactions will be quoted, unless specified otherwise, from the spot date to the requested date.

While there must be two good London business days between trade date and spot, if a US holiday falls between the trade date and what would otherwise be a good spot date from the London holiday schedule, the US holiday is generally ignored. It is worth noting though that metal will not settle on US holidays. Sometimes it can be the case that certain institutions will prefer to have two clear business days in each of London and New York to ensure that there is sufficient time for both currency and metal to settle. Therefore, it is worth clarifying with the quoting institution to ensure that any possibility of confusion is minimised.

The table below provides guidance on the value dates which take into account those days which are recognised as bank holidays in the UK and US.

Contract Date

Value Date

Holiday

Thur 22-Dec-16 Wed 28-Dec-16 UK Christmas/ Boxing Day, Sunday 25 and Monday 26 December 2016
US Christmas Day, Sunday 25 December 2016
 
Fri 23-Dec-16 Thur 29-Dec-16 UK Christmas/ Boxing Day, Sunday 25 and Monday 26 December 2016
US Christmas Day, Sunday 25 December 2016
 
Thur 29-Dec-16 Tue 03-Jan-17 US & UK New Year's Day, Sunday 1 January 2017
Fri 30-Dec-16 Wed 04-Jan-17 US & UK New Year's Day, Sunday 1 January 2017
Thur 12-Jan-17 Tue 17-Jan-17 US M.L. King, Jr. Birthday, Monday 16 January 2017
Fri 13-Jan-17 Tue 17-Jan-17 US M.L. King, Jr. Birthday, Monday 16 January 2017
Thur 16-Feb-17 Tue 21-Feb-17 US President's Day, Monday 20 February 2017
Fri 16-Feb-17 Tue 21-Feb-17 US President's Day, Monday 20 February 2017
Wed 12-Apr-17 Tue 18-Apr-17 UK Good Friday & Easter,
Friday 14 April and Monday 17 April 2017
Thur 13-Apr-17 Wed 19-Apr-17 UK Good Friday & Easter,
Friday 14 April and Monday 17 April 2017
Thur 27-Apr-17 Tue 02-May-17 UK Early May Day Bank Holiday, Monday 1 May 2017
Fri 28-Apr-17 Wed 03-May-17 UK Early May Day Bank Holiday, Monday 1 May 2017
Thur 25-May-17 Tue 30-May-17 US Memorial Day & UK Spring
Bank Holiday, Monday 29 May 2017
Fri 26-May-17 Wed 31-May-17 US Memorial Day & UK Spring
Bank Holiday, Monday 29 May 2017
Fri 30-Jun-17 Wed 05-Jul-17 US Independence Day, Tuesday 4 July 2017
Mon 03-Jul-17 Wed 05-Jul-17 US Independence Day, Tuesday 4 July 2017
Thur 24-Aug-17 Tue 29-Aug-17 UK Summer Bank Holiday, Monday 28 August 2017
Fri 25-Aug-17 Wed 30-Aug-17 UK Summer Bank Holiday, Monday 28 August 2017
Thur 31-Aug-17 Tue 05-Sep-17 US Labor Day, Monday 4 September 2017
Fri 01-Sep-17 Tue 05-Sep-17 US Labor Day, Monday 4 September 2017
Thur 05-Oct-17 Tue 10-Oct-17 US Columbus Day, Monday 9 October 2017
Fri 06-Oct-17 Tue 10-Oct-17 US Columbus Day, Monday 9 October 2017
Tue 21-Nov-17 Fri 24-Nov-17 US Thanksgiving Day, Thursday 23 November 2017
Wed 22-Nov-17 Fri 24-Nov-17 US Thanksgiving Day, Thursday 23 November 2017
Thu 21-Dec-17 Wed 27-Dec-17 UK Christmas/ Boxing Day, Monday 25 & Tuesday 26 December 2017
US Christmas, Monday 25 December 2017
Fri 22-Dec-17 Thur 28-Dec-17 UK Christmas/Boxing Day, Monday 25 & Tuesday 26 December 2017
US Christmas, Monday 25 December 2017
Thur 28-Dec-17 Tue 02-Jan-18 US and UK New Year's Day
Monday 1 January 2018
Fri 29-Dec-17 Wed 03-Jan-18 US and UK New Year's Day
Monday 1 January 2018

Value Dates 2018

Delivery of a currency and metal is effected on the "spot date" for the first leg of the spot or forward transaction. Excluding bank holidays, it means that a trade entered into on a Monday will settle on a Wednesday and a trade entered into on a Friday will settle on the following Tuesday. Forward transactions will be quoted, unless specified otherwise, from the spot date to the requested date.

While there must be two good London business days between trade date and spot, if a US holiday falls between the trade date and what would otherwise be a good spot date from the London holiday schedule, the US holiday is generally ignored. It is worth noting though that metal will not settle on US holidays. Sometimes it can be the case that certain institutions will prefer to have two clear business days in each of London and New York to ensure that there is sufficient time for both currency and metal to settle. Therefore, it is worth clarifying with the quoting institution to ensure that any possibility of confusion is minimised.

The table below provides guidance on the value dates which take into account those days which are recognised as bank holidays in the UK and US.

Contract Date

Value Date

Holiday

Thu 28-Dec-17 Tue 02-Jan-18 US and UK New Year's Day, Monday 1 January 2018
Fri 29-Dec-17 Wed 03-Jan-18 US and UK New Year's Day, Monday 1 January 2018
Thu 11-Jan-18 Tue 16-Jan-18 US M.L. King, Jr. Birthday, Monday 15 January 2018
Fri 12-Jan-18 Tue 16-Jan-18 US M.L. King, Jr. Birthday, Monday 15 January 2018
Thu 15-Feb-18 Tue 20-Feb-18 US President's Day, Monday 19 February 2018
Fri 16-Feb-18 Tue 20-Feb-18 US President's Day, Monday 19 February 2018
Wed 28-Mar-18 Tue 03-Apr-18 UK Good Friday and Easter,
Friday 30 March and Monday 02 April 2018
Thu 29-Mar-18 Wed 04-Apr-18 UK Good Friday and Easter,
Friday 30 March and Monday 2 April 2018
Thu 03-May-18 Tue 08-May-18 UK Early May Day Bank Holiday, Monday 7 May 2018
Fri 04-Apr-18 Wed 09-May-18 UK Early May Day Bank Holiday, Monday 7 May 2018
Thu 24-May-18 Tue 29-May-18 US Memorial Day and UK Spring
Bank Holiday, Monday 28 May 2018
Fri 25-May-18 Wed 30-May-18 US Memorial Day and UK Spring
Bank Holiday, Monday 28 May 2018
Mon 02-Jul-18 Thu 05-Jul-18 US Independence Day, Wednesday 4 July 2018
Tue 03-Jul-18 Thu 05-Jul-18 US Independence Day, Wednesday 4 July 2018
Thu 23-Aug-18 Tue 28-Aug-18 UK Summer Bank Holiday, Monday 27 August 2018
Fri 24-Aug-18 Wed 29-Aug-18 UK Summer Bank Holiday, Monday 27 August 2018
Thu 30-Aug-18 Tue 04-Sep-18 US Labor Day, Monday 3 September 2018
Fri 31-Aug-18 Tue 04-Sep-18 US Labor Day, Monday 3 September 2018
Thu 04-Oct-18 Tue 09-Oct-18 US Columbus Day, Monday 8 October 2018
Fri 05-Oct-18 Tue 09-Oct-18 US Columbus Day, Monday 8 October 2018
Tue 20-Nov-18 Fri 23-Nov-18 US Thanksgiving Day, Thursday 22 November 2018
Wed 21-Nov-18 Fri 23-Nov-18 US Thanksgiving Day, Thursday 22 November 2018
Fri 21-Dec-18 Thu 27-Dec-18 UK Christmas/ Boxing Day, Tuesday 25 and Wednesday 26 December 2018
US Christmas, Tuesday 25 December 2018
Mon 24-Dec-18 Fri 29-Dec-18 UK Christmas/Boxing Day, Tuesday 25 and Wednesday 26 December 2018
US Christmas, Tuesday 25 December 2018
Fri 28-Dec-18 Wed 02-Jan-19 US and UK New Year's Day
Tuesday 1 January 2019
Mon 31-Dec-18 Thu 03-Jan-19 US and UK New Year's Day
Tuesday 1 January 2019