DEFINITION of 'Bullion Market'

A bullion market is a market through which buyers and sellers trade gold and silver as well as associated derivatives. The London Bullion Market is known as the primary global bullion market trading platform for gold and silver.

BREAKING DOWN 'Bullion Market'

The bullion market is generally known as the market for gold and silver trading. The bullion market is the primary source for gold and silver trading quotes throughout the day. Multiple bullion markets exist across the globe. These bullion markets are typically characterized as over the counter markets. Bullion markets exist in New York, Zurich and Tokyo with London serving as the location for the largest global bullion market. Bullion market trading is known to have a high turnover rate with transactions conducted electronically or by phone. The industrial uses of gold and silver are the primary market drivers for the pricing of the precious metals. Gold and silver traded in the bullion market can sometimes be used as a safe-haven investment or hedge against inflation which may also affect its trading value.

The bullion market is just one of several ways to invest in gold and silver. Other options include exchange-traded funds and mutual funds. These options can be more appealing to investors, because they offer greater flexibility. The SPDR Gold Trust (GLD) is the largest gold exchanged-traded fund by assets as of November 30, 2017. Assets in the fund were $34.6 billion with a trading price of $121.10.

Physical bullion offers less trading flexibility than other gold and silver investments, because it is a tangible object that comes in bars and coins of established sizes, which can be difficult to buy or sell in specific amounts. Bullion is also expensive to store and insure.

London Bullion Market

The London Bullion Market is the primary bullion market for trading globally. The London Bullion Market is an over the counter market open 24 hours a day. It transacts gold and silver at market spot prices and also includes trading of forwards and options on the metals. The market is maintained by the London Bullion Market Association which has established standards for production quality of metals transacted and settled within the market. It offers a global standard for precious metal transactions. As of November 30, 2017, gold was trading at USD1,280.20 or GBP948.88 on the London Bullion Market exchange. The London Bullion Market includes approximately 150 members from over 30 countries. Membership companies primarily derive the majority of their business revenues from gold or silver bullion. Members pay approximately £5,000 to £12,000 ($6,735 to $16,164) annually for membership. 

  1. Gold Fund

    A gold fund is an alternative way for investors to own gold without ...
  2. Gold Bull

    A gold bull is a trader or investor who trades with the anticipation ...
  3. Short Gold ETF

    A short gold ETF is an exchange-traded fund which seeks to profit ...
  4. London Spot Fix

    The London spot fix is a daily rate set of each precious metal ...
  5. Silver

    Silver is an element commonly used in jewelry, coins, electronics ...
  6. Double Gold ETF

    A double gold exchange-traded fund (ETF) is designed to respond ...
Related Articles
  1. Investing

    London Banks Want Gold Traded on Exchange

    London's ancient gold bullion market is looking to make major shifts in its operations.
  2. Investing

    The Best Way To Buy Silver

    Discover whether ETFs or physical bullion is the best way for investors to get exposure to silver.
  3. Investing

    Getting Into The Gold Market

    Maximise your portfolio by learning different opportunities for investing in gold, including bullion, mutual funds, futures, mining companies, and more.
  4. Investing

    4 Ways to Invest in Gold (GLD, FSAGX)

    Discover four different investment vehicles that investors can utilize to obtain exposure to the gold market in the precious metals sector.
  5. Investing

    (GLD) SPDR Gold Shares: Who Is Invested?

    Learn about SPDR Gold Shares, including why it may be a good way to diversify a portfolio, who owns it and how it has performed in recent years.
  6. Investing

    iShares Gold Trust ETF

    The costs of buying gold, insuring and storing it can be substantial for individual investors. The fund provides a lower-cost method to buy and hold gold.
  7. Investing

    Top 5 Gold ETFs for 2018

    Gold ETFs offer a convenient way to take advantage of the volatility of the precious metals market.
  8. Investing

    (BK, SIVR, AGQ) 3 Bond ETFs in the Silver Sector

    Find out about the top ETFs that track the silver sector, such as the iShares Silver Trust ETF, ETFS Physical Silver Shares ETF and ProShares Ultra Silver ETF.
  9. Investing

    The Top 5 Gold Equity Mutual Funds for 2016

    Discover five gold equity mutual funds that specialize in investing in companies that are engaged in mining, processing, fabricating or distributing gold.
  10. Investing

    Why Gold and Silver Prices are Diverging (GLD, SLV)

    Gold and silver prices are seeing a big performance divergence in 2016. Here's why.
  1. Has gold been a good investment over the long term?

    Examine the investment performance of gold dating back to 1933, when President Roosevelt required all gold bullion, coins ... Read Answer >>
  2. What countries have the largest gold reserves?

    Find out which countries have the largest gold reserve stockpiles, and why governments still feel that it's necessary to ... Read Answer >>
  3. Why should you invest in tangible assets?

    There are several benefits to investing in tangible assets, such as bullion, real estate, art, collectibles and other physical ... Read Answer >>
  4. Does Warren Buffett invest in gold? Why or why not?

    Discover what Warren Buffett's investment stance is toward gold and silver, why he likes one of them a lot and the other ... Read Answer >>
Trading Center