Why London sits at the heart of the global precious metals market
London’s dominance in global precious metals trading rests on an over-the-counter structure built for flexibility, plus centuries of institutional trust anchored by standardized “good delivery” rules that make bullion fungible across the world.
London is the primary clearing hub for OTC precious metals settlement.
Bilateral trading allows flexible sizes, qualities, dates and locations.
The London good delivery list underpins global bullion standards.
Over-the-counter trading: flexibility is the feature
The global precious metals market operates largely as an over-the-counter market, where trades are agreed bilaterally rather than executed on an exchange. Participants transact on a principal-to-principal basis, meaning credit, settlement and counterparty risks sit between the two parties.
That structure gives dealers the ability to quote variable quantities, qualities and forms of metal, and to tailor value dates and delivery locations. Compared with futures exchanges — defined by standardized contract sizes, delivery dates and settlement points — the OTC market provides wider customization for clients.