LMEprecious – What is it?

Posted November 11th 2016

LMEprecious is a new initiative created by the London Metal Exchange (LME), the World Gold Council and a group of leading industry players, which will launch a new set of precious metal products and broaden the offering for the precious metals community.

Set to launch in the first half of 2017, LMEprecious will comprise spot, daily and monthly futures for gold and silver with all trading to be centrally cleared on LME Clear. Developed in response to a demand from the market it will deliver greater choice for market participants, modernising both the gold and silver market to reflect the current need of global players.

The LME’s Head of Business Development has advised this will not render the London Bullion Market Association (LMBA) gold and silver price benchmarks obsolete. He poses the opinion that both markets can work alongside each other, saying ‘I don’t think we should be scared about introducing new benchmarks to the market because of fragmentation. This is a hugely vibrant market and the market will ultimately arbitrage out of the difference’.

According to the LME wesite, key features of the gold and silver contracts will be:

  • A highly flexible date structure – Gold and silver can be traded on a daily basis, from T+1 (TOM), T+2 (SPOT), through to T+25. LMEprecious also offers standardised monthly futures contracts, out to five years.
  • Tradeable carries between all future dates – Including the crucial TOM/NEXT carry trade for inventory management, and monthly roll trades for funds and other investors.
  • Displayed electronic liquidity from day one – The LME’s market-making partners will deliver deep and tight executable prices across the gold and silver forward curves
  • Loco London delivery – Gold and silver bullion physically held in London allows for the efficient settlement between LMEprecious and OTC market deliveries.
  • Optimised capital management – LMEprecious contracts are cleared by LME Clear, the LME’s custom-built metals CCP, with scope for material capital savings.
  • Flexible booking model – LMEprecious contracts can be traded electronically via LMEselect, and through the 24-hour telephone market.

The LME has not traded precious metals since the 1990’s but this is a step in the right direction for them, with plans to add platinum and palladium in the latter half of 2017. Aram Shishmanian, CEO of the World Gold Council (WGC), commented, ‘Over time this will be viewed as a new era for the London gold market. Gold has become a financial asset again – the underlying message is gold needs to be mainstream.’



Posted November 3rd 2016

In the aftermath of Brexit there has been much uncertainty regarding the future of the British economy and what the impact might be on the automotive industry, which for the past decade has been one of our biggest success stories. The industry currently provides approximately 800,000 jobs across the UK, accounting for over £69.5 billion turnover last year, and adding £15.5 billion in value to economy.

Despite the fears that have been raised, and the uncertainty that still surrounds how and when Britain will leave the EU, on Thursday many were excited to hear the news that Nissan had committed to building 2 new car models at the Sunderland plant currently owned by the company. The Japanese company will be producing the next Qashqai and next X-Trail model at the plant which will secure more than 7,000 jobs and is undoubtedly a welcome step for the UK.

With around 80 per cent of the vehicles produced at the Sunderland plant being exported, the prospect of changing tariffs and customs is one that has had the motor industry worried. Despite this, Nissan have committed themselves to retaining and increasing investment in the plant with chairman and CEO Carlos Ghosn commenting ‘The support and assurances of the UK government enabled us to decide the next-generation Qashqai and X-Trail will be produced at Sunderland. I welcome British prime minister Theresa May’s commitment to the automotive industry in Britain and to the development of an overall industrial strategy’.

This could also be, in turn, a welcome step for the UK steel industry which has been suffering heavily this year. Nissan has previously advised that over half the steel used at the Sunderland plant comes from Port Talbot, with the rest sourced in mainland Europe.