CITIGROUP has become the first new member in a decade to join the elite group of banks clearing physical gold and silver in London, as the US lender deepens its presence in the $200bn-a-day bullion market, said the Financial Times on Tuesday.
The move takes the number of banks approved by London Precious Metals Clearing Ltd (LPMCL) to clear physical gold and silver to five, ending the decade-long grip of the so-called Big Four — JPMorgan, UBS, ICBC and HSBC — who had previously been the only banks permitted to clear metal in London, effectively forcing rivals to rely on their services, the newspaper said.
London remains the world’s biggest and most liquid physical gold market, with average daily turnover of about $207bn in the second quarter. The market’s dominance rests on an extensive vaulting network, including the Bank of England and private facilities, which together held roughly $1.4tn of gold by the end of May.
LPMCL, owned by its clearing banks, has long been criticised for opacity and unclear membership rules, though these were formalised in 2018. James Cressy became independent chair last year.
Citi’s admission follows a lengthy application process and comes amid extreme volatility in precious metals, with gold and silver both striking record highs in late January before falling sharply since.
Citi’s José Cogolludo, head of commodities, called the step a natural extension of its precious metals business. Cressy said the move showed the clearing process was open to new entrants, while former LBMA chair Paul Fisher previously noted wider membership could improve market liquidity.
