LME to Scrap Precious Metal Trading in July

The trading started on a strong note, with gold, silver and associated derivatives changing hands trillions of dollars each year.

SEATTLE (Scrap Monster): The London Metal Exchange (LME) announced its decision to abandon precious metals trading after just five years, following low trading volumes and activity. The gold and silver futures trading will come to an end by July this year, said the press release by the Exchange.

The Exchange had launched the precious metal contracts in 2017, in partnership with leading banks including Goldman Sachs Group Inc and Morgan Stanley. The LMEPrecious consortium also comprised of ICBC Standard Bank Plc, Natixis SA, proprietary trader OSTC Ltd. and the World Gold Council.

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The trading started on a strong note, with gold, silver and associated derivatives changing hands trillions of dollars each year. At its peak, the contracts traded approximately 3 million ounces of gold every week. However, trade volumes witnessed steep decline after Societe Generale SA decided to close most of its commodity trading business in 2019. Incidentally, the above contracts have not traded since 2020, LME noted.

The LMEPrecious service will be abandoned on or around July 11, the exchange clarified in a notice issued to its members. The decision has been taken after discussions with market participants and in the wake of the low levels of trading activity within the LMEPrecious market.

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