London Good Delivery (LGD) bars meet the standards set by the London Bullion Market Association (LBMA) of which all key players in the bullion market are members. LGD bars weigh 400 troy ounces (about 12.4 kilograms) and are produced in one of the LBMA accredited refineries; they are assayed and guaranteed to have a minimum acceptable fineness of 995.0 parts per thousand fine gold. The LBMA was founded in 1987 by the Bank of England, the bullion market’s regulator at the time, and instituted the London Good Delivery standard, to ensure the transparency and liquidity of the bullion market. The LGD specification was rapidly adopted by the industry, becoming the accepted standard for the quality of gold bars traded in the market and helping to make London a fast-growing base for the world’s trade in bullion.
The Good Delivery specification ensures that bars meet clear quality standards, allowing professional traders to accept new bars without having to verify their gold content (assaying). LGD bars are therefore ready and available for immediate use in financial operations. Although the Good Delivery Rules were issued after the Bank of Italy acquired its gold holdings, a large part of the bullion in fact meets their specifications.
The Bank of Italy has no intention, for the time being, of upgrading its gold to conform with the LGD standard as it judges the present quantity to be sufficient for any financial needs. Gold bars that do not meet the LGD specification can still be sold – though at a discount on the official market price, usually equal to the cost of upgrading. The discount is not normally applied to gold bars with a particularly high degree of fineness.
