Why Invest In London Good Delivery Gold Bars?

Introduction

So here you are, seeking to lay your eyes upon the holy grail of gold investments: the 12.5 kilogram trapezoid ingot-shaped gold bars, commonly known by several names such as the 400 oz gold bar, London Good Delivery gold bars, or those bars securely kept at Fort Knox in the United States.

Well, you would be correct if you named them any of the above, but it's important that investors know what makes these gold bars London Bullion Market Association (LBMA) approved. But before that, we must first explain who the LBMA are and the strict criteria that are set to make a London Good Delivery gold bar.

The London Bullion Market Association (LBMA) was established in 1987 with the involvement of the Bank of England and other leading bullion banks and traders. As part of its formation, the LBMA merged the London Gold Market and Silver Market, consolidating them under its governance. However, it was over two centuries ago in 1750, that the Bank of England initiated the Good Delivery list, a list acknowledging bars of precise specifications deemed suitable for trading on the London market.

Why Invest in London Good Delivery Gold Bars

Gold is often utilised as a hedge against inflation or currency devaluation, providing an investment avenue for preserving wealth. For instance, in Q1 of 2024, gold experienced a significant increase in its total value per ounce, reaching nearly +15% in Great British Pounds (GBP). The price fluctuated between a 3-month low of approximately £1,578 and a high of £1,859. During this period, gold reached new All-Time-Highs (ATH) on several occasions, which can be attributed to various factors of economic uncertainty, such as escalating conflicts in the Middle East and the Russo-Ukrainian War, along with persistently high interest rates, all contributing to the thriving gold market.

Figure 1 - Gold Price Last 3 Months per Ounce (GBP) (09/01/2024 - 08-04/2024)

Now that you are aware of how the price of gold can be driven in an upward trajectory, let's discuss the potential investment in London Good Delivery gold bars. Each gold bullion good delivery bar contains, on average, 400 ounces of gold. Consequently, if you had invested in one of these bars just 3 months ago, following the 15% increase per ounce of gold in GBP during Q1 2024, you would have made £94,000+ if you sold it now, before considering the premium at which you purchased it and factoring that into the total profit earned.

Additionally, another scenario involves investors who own Good Delivery gold bars containing 430 troy ounces, the maximum amount to qualify for a London Good Delivery gold bar. They would have made £100,000+ or more within the same time period.

Now, we understand that not every investor has £740,000+ to spend on a single investment. However, investing in any amount of gold, whether in gold coins or gold bars, can be beneficial for diversifying your investment portfolio and may eventually lead to owning one of these prestigious Good Delivery gold bars. Oh, and by the way, these bars are quite heavy, so you may need to use two hands!

400 oz Gold Bullion Good Delivery Bar

These investment-grade Gold Bullion Good Delivery Bars are London Bullion Market Association (LBMA) approved 400 oz gold bars selected from a variety of LBMA-approved refiners, containing approximately 12.5 kilograms of pure, 24 carat gold.

It's important to note that London Good Delivery gold bars can weigh between 350 troy ounces (10.9 kilograms) and 430 troy ounces (13.4 kilograms). You only pay for the exact metal weight of the ordered bar, plus the premium.

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Good Delivery Rules For Gold Bars

Overview of London Good Delivery Standard: The London Good Delivery Standard plays a critical role in ensuring the integrity and efficiency of the global bullion market by setting forth clear guidelines for the production, quality assurance, and trading of gold and silver bars. Among the LBMA’s rules for Good Delivery Bars, they must be:

Gold Bars

Bars typically weigh a few ounces either side of 400 troy ounces (roughly 12.5 kilos) but the stated specifications are:

• Length (Top): 250 mm+/- 40 mm.
• Undercut* range: 5-25 degrees
• Width (Top): 70 mm +/- 15 mm.
• Undercut*: 5-25 degrees
• Height: 35 mm +/- 10 mm

The undercut refers to the degree of slope on the side and ends of the bar and is calculated using the following formula: 90 degrees (ATAN(H/((T-B)* 0.5))), where H=Height, T= Top, and B=Bottom dimensions of the bar, the bottom dimension being measured to the theoretical sharp edges.

Fineness

The minimum acceptable fineness is 995.0 parts per thousand fine gold.

Marks

• Serial number
• Assay stamp of refiner
• Fineness (to four significant figures)
• Year of manufacture

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How to Invest in London Good Delivery Bars

Given that investing in London Good Delivery gold bars involves a significant amount of money, we highly recommend purchasing exclusively from LBMA-approved refiners listed on the Good Delivery list or from reputable bullion dealers who are members of the LBMA.

Chards are full members because we are active in Loco London and Loco Zurich on the wholesale market, which means we buy metal and use vaulting services in these locations. Loco Zurich allows us to offer our customers VAT-free silver and platinum coin and bars from bonded warehouse facilities.