“LBMA” is an acronym that is incomprehensible to many novice investors. On many portals dedicated to precious metals, you can find advice about the fact that it is in bars marked with these letters that you should invest. What is hidden under the LBMA acronym? Is it safe to buy bars not marked with this acronym? We will answer these questions in today's post. We will also explain what the London Bullion Market Association does and what its role is in the precious metals market.

LBMA history and LBMA list - what is accreditation of a mint or other institution?

The acronym LBMA is the name of the London Bullion Market Association. It was founded in 1987 on the initiative of the Bank of England in cooperation with major banks and financial institutions around the world. The LBMA's main goal is to provide those investing in gold and silver with a so-called Good Delivery List. This is a collection of precious metal suppliers and producers who meet the organization's strict requirements. The LBMA brings together such institutions as:

• - national banks of the greatest importance in a given country (e.g. Bank of America, Bank of China, Perth Mint)
• - bullion companies (e.g. Valcambi, Umicore, Heraeus, Royal Canadian Mint)
• - companies engaged in the transportation and storage of bullion under professional conditions (e.g., Brink's Limited, Loomies International)
• - refiners (e.g. ABC Refinary, Agosi AG)

As of March 2023, the LBMA included nearly 150 of the world's renowned gold producers, mints, transport companies and other institutions. All the companies belonging to the organization were subjected to a long, intensive audit. The standards for evaluating gold producers are very strict. The LBMA carefully checks each company's history, relationship with the market and financial situation. It is also crucial to inspect how and from where a company obtains bullion. This is because the LBMA makes sure that an institution's source is ethical and legal, and that the mining process itself should be done using acceptable methods.

Joining the organization is a very long process. For a declaration to be accepted, a company needs recommendations from three companies that are already members of the LBMA. It is also advisable to establish a relationship with them, which lasts a minimum of one year on the date of application. A company joining the LBMA is also required to comply with the NIPS, or Non-Investment Product Code. This is a regulatory document that was developed while working with the UK foreign exchange markets. Once an institution meets all the stringent requirements and proves its reliability, it is listed as a member of the LBMA, and the products it offers are certified.

LBMA-certified gold bars - why buy them?

LBMA-certified investment gold is very popular even among experienced investors. Many of them choose to buy only those bars that come only from accredited mints. As it turns out, however, they have good reason to do so. LBMA-certified gold bars have much greater liquidity than bullion products that do not have it.

The first reason for buying LBMA gold is its unquestionable quality. The organization conducts regular audits among its members. The goal of these activities is to ensure the highest possible quality of LBMA investment gold. Every stage in the production of a given bullion product must be approved by the organization, which guarantees not only pure composition, but also undeniable aesthetic qualities. This, in turn, goes hand in hand with the undeniable reputation that LBMA-accredited gold bars enjoy. It is another reason why it is worth betting on products with this certification. The prestige enjoyed by the LBMA makes accredited gold and silver bars eagerly purchased by both investors and larger companies. This, in turn, has a direct impact on the excellent liquidity of certified bullion. This is because LBMA gold and silver is recognized in the precious metals market worldwide. An investor holding an accredited bar or bullion coin can be sure to sell it at an attractive price.

As mentioned earlier, the LBMA oversees whether the gold and silver offered by affiliated institutions was obtained ethically. By reaching for accredited bars, investors can be assured that no slave labor or child labor was used in their production. LBMA-accredited gold must also not come from conflict zones or illegal mines.

Are gold bars without a London Bullion Market Association certificate safe?

Various silver and gold bars without LBMA accreditation can be found on the bullion market. Many investors - especially beginners - then wonder whether it is safe to purchase such a product. However, the answer depends on a number of factors.

The LBMA has very specific requirements for what gold bars can be offered by member insitutions. The lowest acceptable grade of the product is 995. In addition, the bars must weigh a minimum of 350-430 ounces. In a situation where a manufacturer does not have such products on offer, LBMA accreditation is simply unnecessary for him. Thus, companies that focus primarily on the production of bullion coins and smaller bars do not apply for membership in the organization. They usually target the retail market and investors who prefer to purchase small precious metal products. However, the organization's restrictions do not mean that retail customers cannot invest in LBMA gold. Many accredited producers of banked bars - that is, those weighing around 350-430 ounces - are also involved in the production of smaller bullion products. So it is worth buying several-gram bars and bullion coins from mints that are LBMA-certified or declare cooperation with LBMA entities.

Gold products without LBMA certification are therefore not necessarily fake or contaminated with other metals. However, it is worth going for products from gold suppliers that have managed to meet all the strict requirements of this organization. This way you can be sure that your money is invested in products of the highest quality.

How to check if an investment gold producer is accredited?

Those who invest in gold know full well that vigilance and caution are essential for survival in the rather capricious precious metals market. After all, nowadays it is not a problem to write in the offer of a bar or coin that it comes from an accredited manufacturer. In such a case, all you have to do is look at the LBMA's official website. On it you can find a clear list of all member institutions. If the seller declares that the gold he offers is certified by the LMBA, just ask who the manufacturer of the product is. If it's not on the official list, it's better not to take a chance with the purchase.