Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Factions' statement: The attendees agreed to support and continue implementing the ceasefire agreement measures, including the withdrawal of the occupation and lifting the siege.
Factions' statement: Calling for an end to all forms of torture and violations against prisoners in occupation prisons and the necessity of obligating the occupation to do so.
Statement: The current moment is crucial, making the meeting a true turning point toward national unity in defense of our people and their right to life, dignity, and freedom.
Factions' statement: Call for an urgent meeting of all Palestinian forces and factions to agree on a national strategy.
Factions' statement: Continuing joint work to unify visions and positions to confront the challenges facing the Palestinian cause.
Statement of the factions: Emphasis on the unity of the Palestinian political system and the independent national decision.
Statement: Approval to establish an international committee to oversee the financing and implementation of the reconstruction of the Gaza Strip.
Statement: The committee is responsible for managing life and services in cooperation with Arab brothers and international institutions, based on transparency and accountability.
Resistance factions' statement: Agreement to hand over the administration of the Gaza Strip to a temporary Palestinian committee of independent technocrats.
Al Mayadeen's correspondent: Two people martyred in the Israeli airstrike that targeted a vehicle in Toul.

Europe's Central Bank warns of global Gold market risks: FT

  • By Al Mayadeen English
  • Source: Financial Times
  • 14 Aug 2025 15:34
  • 1 Shares
3 Min Read

ECB warns opaque global gold market poses stability risks, prompting calls for BIS oversight of clearing, settlement, and vaulting systems.

Listen
  • x
  • A tram drives past the European Central Bank building in Frankfurt, Germany, on May 2, 2023.
    A tram drives past the European Central Bank building in Frankfurt, Germany, on May 2, 2023. (AP)

The European Central Bank (ECB) has warned that the global gold market’s concentration, opacity, and reliance on over-the-counter (OTC) trading could pose risks to financial stability during extreme events.

In an opinion piece written by Bernhard Schnellmann for the Financial Times (FT), he mentions that in a recent report, the ECB noted that vulnerabilities have emerged because commodity markets are dominated by a small number of large firms, often involve leverage, and rely heavily on opaque OTC derivatives. He explained that the bank cautioned that disruptions in the physical gold market could increase the risk of a market squeeze.

According to the FT report, the ECB’s warning comes amid growing scrutiny of the institutions that underpin the world’s largest OTC bullion market.

At the center are the London Bullion Market Association (LBMA), a private trade body setting global gold standards, and London Precious Metals Clearing Limited (LPMCL), a private consortium handling trade settlement. While both exercise significant influence over the market, used by central banks, sovereign wealth funds, and retail investors, neither has formal regulatory authority, Schnellmann stated. 

The LBMA’s "Good Delivery" standard requires bars to weigh about 400 troy ounces with a minimum fineness of 995 parts per thousand. While efficient for institutional vaulting, these bars do not match the kilobar demand in Asian consumer markets.

According to the FT report, this mismatch forces Swiss refiners to import 400-ounce bars from London, remelt them into kilobars, and reverse the process when demand drops, an operation criticized as both economically inefficient and environmentally questionable.

Centralization and chokepoint risks

London’s concentration of gold vaulting infrastructure, much of it within reach of the Bank of England, creates a potential chokepoint. Schnellmann argues that in times of heightened trading or supply chain disruption, liquidity could be constrained, yet the structure of the market has remained largely unchanged.

The report mentions that the LBMA and LPMCL operate with significant authority, determining eligibility, access, and settlement terms in a market critical to global finance. However, the lack of formal accountability raises concerns over dispute resolution and systemic resilience in times of crisis.

The ECB urged a reassessment of gold market governance, suggesting that the Bank for International Settlements (BIS) could oversee key elements of clearing, settlement, and vaulting. Additionally, the BIS already serves as custodian for many central banks’ gold reserves and has a neutral legal status under international law.

Such a reform would not replace the LBMA’s role in setting technical standards but would transfer oversight of market infrastructure to an institution with a global legal mandate, aligning the gold trade with other regulated financial systems.

According to Schnellmann, Gold remains a cornerstone of financial security for both institutions and individuals, but the system that supports its trade has lagged behind the globalization and digitization of financial markets.

As central banks continue to expand their gold holdings, analysts warn that leaving market governance entirely in the hands of private institutions could amplify risks during periods of geopolitical tension, cyber threats, or liquidity stress.

  • Gold market
  • Gold prices
  • Bank of England
  • European Central Bank
  • European Union

Most Read

From previous scenes of the Qassam Brigades targeting an Israeli D9 bulldozer with a Yassin 105 shell, east of Deir al-Balah. (Military Media of the Qassam Brigades)

US knew fatal Rafah blast cause was not Hamas op., says journalist

  • Politics
  • 20 Oct 2025
'Israel’s Digital Iron Dome: Weaponizing the web against Palestine

'Israel’s Digital Iron Dome: Weaponizing the web against Palestine

  • Technology
  • 24 Oct 2025
Abu Hamza, the spokesperson for the Al-Quds Brigades, during a speech televised on October 22, 2025 (Al-Quds Brigades Military Media)

Al-Quds Brigades' Abu Hamza mourns leaders, vows continued resistance

  • Politics
  • 22 Oct 2025
US missionary kidnapped in Niger capital, suspected taken toward Mali

US missionary kidnapped in Niger capital, suspected taken toward Mali

  • Africa
  • 23 Oct 2025

Coverage

All
War on Gaza

Read Next

All
Flags of Iran, Russia, and China (IRNA)
Politics

Russia, China, Iran send joint letter to IAEA on Resolution 2231 end

Rubio says UNRWA to play no role in Gaza aid deliveries
Politics

Rubio says UNRWA to play no role in Gaza aid deliveries

Tents are seen at UN school used as a shelter for displaced Palestinians in Khan Younis, Tuesday, September 30, 2025. (AP Photo/Jehad Alshrafi)
Politics

UN warns of 'lost generation' amid Gaza education crisis

x
Politics

White House pushes to repeal US sanctions on Syria: Report

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS