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Bullion and Brexit: How the UK's Exit from the EU is Impacting the London Bullion Market

Published by Tavex Analysts in category Market News on 31.01.2023
Gold price (XAU-GBP)
1,925.19 GBP/oz
  
- GBP1.99
Silver price (XAG-GBP)
23.02 GBP/oz
  
- GBP0.07

The United Kingdom’s (UK) exit from the European Union (EU), also known as Brexit, has had a significant impact on the London bullion market. The UK’s departure from the EU has raised a number of concerns about the future of the bullion market in London, as well as the broader impact on the global economy.

One of the most significant concerns is the potential impact on trade. The UK has been a major player in the global bullion market, and Brexit has raised concerns about the future of trade relations with the EU. This could potentially lead to tariffs and other trade barriers that could make it more difficult for UK firms to do business with their EU counterparts. This could also lead to increased competition and lower prices for bullion in the London market.

Another concern is the potential impact on the London Bullion Market Association (LBMA), which sets the standards for good delivery and acts as a clearing house for bullion transactions. The LBMA has been a major contributor to the development of London as a leading destination for bullion investment, but Brexit could potentially lead to a loss of influence for the organization.

Additionally, the UK’s exit from the EU may also impact the regulatory environment for bullion trading in London. The EU has been a major contributor to the development of regulations for the bullion market, and Brexit could lead to a loss of alignment between UK regulations and those of the EU. This could create uncertainty for investors and traders in the London market.

Finally, there’s also concerns about the possible impact of Brexit on the broader global economy. The UK’s exit from the EU could lead to economic uncertainty and volatility, which could in turn impact the demand and price of bullion in the London market.

In conclusion, the UK’s exit from the EU, also known as Brexit, has had a significant impact on the London bullion market. The potential impact on trade, the role of the LBMA, the regulatory environment and the broader global economy, have raised a number of concerns about the future of the bullion market in London. However, it’s still too early to know the full extent of the impact of Brexit on the bullion market. It will largely depend on the final trade agreement reached between the UK and EU, and how it addresses issues such as tariffs and regulatory alignment.

Despite the uncertainties caused by Brexit, London’s well-established market infrastructure and expertise in the field of bullion, along with the range of storage options, still makes it a leading destination for the trade and storage of precious metals. Furthermore, London’s commitment to innovation and technology, as well as its strong reputation as a global financial hub, should help to mitigate the potential negative impacts of Brexit on the bullion market. It will be important for the market participants to closely monitor the developments regarding the trade agreement and adapt accordingly.

Gold price (XAU-GBP)
1,925.19 GBP/oz
  
- GBP1.99
Silver price (XAG-GBP)
23.02 GBP/oz
  
- GBP0.07

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