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London’s streets were rumored to be paved with gold, once upon a time. Now they seem to be paved with chit-chat and hearsay regarding the future of the City’s bullion trade. Now, not to repeat myself, but the London bullion market is currently in a state of transition. To what, exactly, is anyone’s guess. Over-the-counter to exchange, maybe, if the London Metal Exchange can get its hands on it. Disclaimer: all of this is basis analysis of high-level conversations with senior market participants. Nothing is yet publicly known and no parties mentioned in this blog will comment. Paranoia, maybe. Non-disclosure agreements, most certainly. So, the London Bullion Market Association ‘request for proposal’ rattles on. Most have little time to give to the process, as they have businesses to run. The five parties rumored to be in the final beauty parade are: CME Group, the LME, IntercontinentalExchange, Autilla/Cinnobar and Markit/ABS. No comments all round. As such, chatter prevails. Here are the most recent musings: The LME is aggressively gunning for the London market. “At any cost,” according to one senior source. The LBMA needs to keep London relevant. A deal with the LME — which is owned by Hong Kong Exchanges and Clearing — would mean a direct link to the Chinese market, the world’s number one gold consumer. Then there’s CME. At the moment it faces a slight uphill battle, owing to some reputational damage linked to recent hiccups related to the LBMA Silver Price (operated and administrated by CME and Thomson Reuters). However, CME operates the world’s largest gold exchange by volume. One source said the market will gravitate to where the largest pool of liquidity is, that being COMEX. However, a banker said he would see a CME win as a step backward, rather than forward. “The Chinese are buying the gold; why would London want the US to dominate the space?” he said. Still, it is worth noting that CME does have exposure to Asian markets. In late 2014 the Shanghai Gold Exchange and CME signed a memorandum of understanding to “positively explore possibilities of cooperation between the domestic and international markets.” Also, CME launched a physically delivered Gold Kilo futures contract in Hong Kong in early 2015. The result of the RFP should create a platform that creates future growth for the London market. “[The] LBMA ...