LBMA in 2025: Price Formation Under Historic Stress

The London Bullion Market Association's twice-daily gold fix set 53 new

all-time highs in 2025 — more than one record every five trading days.

Silver gained 144.82 percent, gold 44.65 percent through the first three

quarters, and the institutions that underpin physical precious-metals

pricing were stress-tested as never before.¹

The Fix That Moved 53 Times

The LBMA PM gold price — the afternoon fix set through an auction among

LBMA member banks — is the reference against which most of the global

gold market settles. In a normal year, a handful of new all-time highs

would be unusual. In 2025, the mechanism delivered 53.¹ That is not a

gentle drift upward; it is a sustained, high-frequency repricing of the

benchmark.

The numbers behind the prints are equally striking. Gold opened 2025 at

US$2,644.60 (AM fix on 2 January) and closed the third quarter at

US$3,825.30 (PM fix on 30 September), for a year-to-date move of 44.65

percent.¹ The fourth quarter added another leg of gains that took the

annual average to US$3,431 per ounce, according to World Gold Council's

2025 Demand Trends data.²

Trading Volume and Liquidity

Volumes were also unusual. LBMA-cleared over-the-counter trading in gold

rose meaningfully during 2025 as investors rotated positioning more

actively. Central-bank and sovereign-wealth-fund activity accumulated to

roughly 1,000 tonnes per year — equal to at least 25 percent of the

annual mined supply — and that official-sector flow had to find a home

somewhere in the London clearing system.¹

Silver's performance was the more dramatic story operationally. The

metal moved from US$29.41 at the start of 2025 to around US$75 per ounce

at year-end, a gain of 144.82 percent. Industrial demand — solar,

electronics — collided with investor appetite and physical tightness,

and LBMA infrastructure absorbed a significantly larger volume of silver

trading than in any recent year.

The structure of the silver move is worth noting. Unlike gold, where

central banks anchor the bid, silver's 2025 rally was driven by a

coalition of industrial fabricators, retail investors and financial

speculators with little official-sector involvement. That made the price

action more volatile intraday but no less sustained across the year. The

LBMA's silver auction mechanism handled the throughput without breaking

stride.

The Forecast Survey vs Reality

Each year the LBMA runs a forecast survey with leading analysts. At the

beginning of 2025, the 30 participating analysts expected the average

gold price for the year to be US$2,735.33 — itself a bullish number

relative to 2024.¹ The actual outcome of US$3,431 blew through that

forecast by a wide margin.

The dispersion of individual analyst forecasts is itself informative.

The 2025 survey's highest gold forecast was comfortably below the final

realised average. No single analyst — even among specialists who had

been calling for a higher gold regime for years — expected the magnitude

of the 2025 move. The industry's price-formation process, in other

words, was behind the market throughout the year.

This matters for 2026 forecasting. If the 2025 consensus missed by

roughly 25 percent, investors should build wider error bands into their

own expectations for the coming year. Metals Focus has publicly moved

its 2026 forecast to US$4,560 per ounce with a plausible path to

US$5,000, and the market has already touched the upper figure. Forecast

humility is an underrated asset in the current gold environment.

The Physical Infrastructure Under Pressure

Price records are one thing; the physical plumbing that supports them is

another. LBMA-accredited refineries had to reallocate capacity on short

notice as investment demand crowded out jewellery demand. Vault

operators in London and Zurich managed higher-than-usual turnover as

allocated-account positions moved between institutional clients.

Bar-and-coin fabrication in smaller formats (10-gram, 100-gram,

one-kilogramme) rose sharply to service retail demand in India, China,

North America and Europe.

Even the premiums on small-format products widened measurably. Standard

400-ounce good-delivery bars traded at close to spot throughout the

year, as expected in a well-functioning market. But smaller

investment-grade bars carried premiums of several percentage points at

the peak of retail demand — a direct measurable signal of the pressure

on the physical channel.

Why the LBMA Model Held

Despite the stress, the LBMA framework held. The auction mechanism for

the twice-daily fix continued to operate, allocated and unallocated

accounts remained in balance, and no member refinery faced the kind of

capacity crisis that could have disrupted the delivery chain. Part of

the reason is design: the LBMA was built over a century to handle

exceptional volatility, and its members have invested heavily in cleared

and collateralised infrastructure.

Part is governance. The LBMA's quarterly and annual reports provided

clear, standardised data throughout the year, enabling the market to

absorb news without information asymmetries spreading into panic. The

transparency that the LBMA has built into its Precious Metals Market

Report series matters particularly in a year when prices move quickly;

it is the stabiliser that allows other participants to trust the

reference.

A further point is the role of cleared settlement. Over the past decade

the LBMA and its member banks have progressively moved more OTC business

onto cleared and collateralised channels. That shift reduces

counterparty risk in precisely the moments when price volatility is most

likely to stress bilateral arrangements. 2025 was the first cycle in

which the bulk of that cleared-settlement infrastructure was tested

under real conditions, and it performed as designed.

Outlook

2026 will test LBMA infrastructure again. The gold price has already

touched US$5,000 in January, and Metals Focus projects an annual average

of US$

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