LBMA Good Delivery: The Standard That Underwrites Global Gold Trading

Why This Obscure Specification Runs the Gold Market

If you have ever wondered why gold trading is so standardized globally — why a bar sitting in a vault in Zurich is treated as economically identical to a bar in Singapore — the answer is the LBMA Good Delivery specification. It is a set of rules published by the London Bullion Market Association that defines exactly what a "London Good Delivery" gold bar looks like, weighs, is stamped with, and is refined from.

The specification is not a piece of financial regulation. It is a private-market industry standard. And yet it functions as global infrastructure for one of the world's most important commodity markets. Central banks, the London bullion clearing system, most institutional investors, and every serious refinery in the world reference this document. Getting off the list of accredited refiners can be existential for a smelting operation. Getting on it is a multi-year process.

This piece is a technical walkthrough for readers who want to understand what the standard actually says, how it operates in practice, and why a change to it can move markets that don't obviously seem related.

The Physical Specification

An LBMA Good Delivery gold bar must meet several precise physical criteria. These have been essentially stable for decades but are worth stating in one place.

The equivalent silver specification is similar in structure but the numbers are different: silver bars are 750 to 1,100 troy ounces (approximately 23 to 34 kg), minimum fineness 999.0 (99.9% pure).

The Refiner Accreditation

You cannot just make bars that meet the physical specification and sell them into the London market. The bars must come from an LBMA-accredited refiner. Accreditation is granted after a rigorous multi-year process that examines the refiner's technical capability, financial standing, production history, and business practices. The current list has approximately 70 refiners globally.

Accreditation is not permanent. Refiners are required to demonstrate continued minimum production volumes, maintain their standards, and pass periodic audits. Loss of accreditation is rare but does happen — and when it does, the affected refiner's existing bars remain "Good Delivery" for a defined transitional period, but no new bars can enter the standard. This transitional handling is important because it prevents disorderly market impact from a refiner's status change.

The Chain of Integrity

The specification is not just about the physical bar. It is about the chain of custody that keeps the bar within a trusted network of vaults, transporters, and settlement participants. A Good Delivery bar that leaves the vault system — for example, into private ownership — can lose its Good Delivery status when it tries to re-enter. Bringing a bar back into Good Delivery status typically requires re-refining and re-assaying, which is expensive.

This is why "allocated" gold in London vaults commands a small premium over "unallocated" claims: allocated gold is by definition Good Delivery bars sitting in the chain of integrity, whereas unallocated claims are book entries that could ultimately be settled with bars that need to be re-verified.

Why the Standard Underwrites the Chinese Market

The Shanghai Gold Exchange runs on a different bar standard — the SGE has its own kilo bar specification, 99.99% pure, with distinct dimensions. So on the surface, the LBMA and SGE standards seem parallel and independent.

In practice they are deeply linked. Most of the physical gold delivered onto SGE ultimately comes from Good Delivery bars that were re-refined into SGE kilo bars in China or Switzerland. When Chinese physical demand is strong, this re-refining flow accelerates and Good Delivery bars come out of London vaults in significant quantities. When Chinese demand weakens, the flow reverses and refined kilo bars can be re-melted back into Good Delivery bars.

The refinery capacity to do this conversion is a real bottleneck. Switzerland has traditionally hosted much of the world's capacity for converting between the two formats. During the March 2020 COVID lockdown, Swiss refineries closed, and the LBMA-to-SGE conversion channel became effectively blocked. This is a large part of the story behind the COMEX-London EFP blowout that same month.

Why the Standard Underwrites COMEX Deliveries

COMEX allows several forms of physical settlement, but the standard 100-ounce COMEX gold futures contract can be settled with a specific set of eligible bars. In practice, most COMEX deliveries settle with kilo bars, not Good Delivery bars, but LBMA Good Delivery-format bars are also eligible on many contracts.

The reason: kilo bars are smaller, more granular, and easier to physically move for the delivery process. The 400-ounce Good Delivery bar is optimized for London vault storage where it may sit for years. When a metal actually needs to change hands between counterparties, smaller units are more practical.

The Refining Chain in Numbers

Roughly 3,500 tonnes of new gold enters the market each year from mining. Almost all of this passes through an LBMA-accredited refiner at some point in its journey to a saleable form. On top of new mine supply, another 1,000-1,500 tonnes per year comes from recycled gold — old jewelry, industrial recovery, and scrap — and this too is refined by the same network of facilities.

The largest gold refineries in the world — Argor-Heraeus, Metalor, PAMP, Valcambi in Switzerland; MMTC-PAMP in India; Rand Refinery in South Africa; Perth Mint in Australia; several in China — process a substantial share of this flow. A serious operational disruption at any of these can create real supply-chain effects that show up in premiums and delivery availability. This is not theoretical; it happened in 2020, in miniature form in 2022 during energy shortages in Europe, and it will happen again.

What a Reader Actually Needs to Know

What This Site Shows

Our LBMA reading on the dashboard is not the Good Delivery bar price directly — it is the running London OTC spot quote, which is what LBMA-accredited counterparties transact at. However, the Good Delivery standard is what underwrites the entire OTC market that our LBMA figure comes from. If the standard were to change materially, or if a major refiner were delisted, our LBMA figure would eventually reflect the disruption because the pricing structure it sits on would move.

For readers who want to track refinery-side news directly, the LBMA publishes updates when refiners are added, delisted, or placed on transitional status. The market impact of these changes is usually delayed by weeks, so the news itself often precedes any premium reading move.