The London Good Delivery gold bar is the universal standard for physical wholesale gold trade. Weighing roughly 400 troy ounces, these bars anchor central bank reserves and clearing houses.
1. Technical Specifications and Tolerances
The London Bullion Market Association (LBMA) enforces strict physical parameters for Good Delivery bars:
- Fine Gold Content: 350 to 430 fine troy ounces (roughly 10.9 to 13.4 kilograms).
- Minimum Fineness: 995.0 parts per thousand (99.5% pure gold).
- Required Markings: Refiner's stamp, assay mark, fineness, serial number, and year of manufacture.
2. The Loco London Clearing System
Wholesale bullion trades settle electronically within a secure network of London vaults operated by custodian banks (such as HSBC, ICBC Standard, and JP Morgan). Rather than physically hauling 12-kilogram bars across town, clearing members transfer unallocated and allocated ledger claims backed 1:1 by vaulted bars.
3. Why Spot Traders Must Track Good Delivery Flow
When physical demand surges (such as during banking crises or geopolitical dislocations), premiums on physical bars rise relative to paper futures. Tracking LBMA clearing volume gives traders an early warning for structural bullish breakouts in XAU/USD.
