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7,449 tonnes of gold are in London’s vaults

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Almost 7,500 tonnes of gold and 32,000 tonnes of silver are stored in eight London vaults, according to figures released by the London Bullion Market Association (LBMA).

The figures represent the first public attempt to calculate precious metal holdings in the capital, with 7,449 tonnes of gold equating to $298 billion and 32,078 tonnes of silver working out at $19 billion – around 596,000 gold bars and 1,069,255 silver bars.

“How much gold and silver is there in the London vaults? It’s a question that I’ve been asked since I joined the market a decade ago and one I’m sure that was asked many years before,” said LBMA CEO Ruth Crowell.

“Today I’m delighted not only to give a meaningful answer, but also to announce that these numbers will be available monthly from now on. After many years of work, I’m extremely grateful to all the vaults and the members of the market for who have made this day possible. Thank you for all your ongoing support.”

Over $18bn in gold was cleared via London on average each day in March this year, making the capital the biggest gold-trading centre in the world.

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Amazon doubles London R&D headcount with new head office

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US multinational online giant Amazon has opened a new head office for its UK operations, in a move that grows its London R&D staff from 450 to 900.

The company has announced that it will take all 15 floors of its new London Development Centre in Shoreditch, taking its London corporate and R&D headcount to over 5,000 across its three facilities. It has invested over £6.4bn in the UK since 2010, and will add 5,000 UK jobs this year as its UK workforce will reach 24,000.

According to its UK country manager, Doug Gurr, “London is one of the world’s truly great cities and home to some of the most talented, creative people on the planet, and we are delighted to provide our teams of innovators with a new, purpose-built workplace.

“While we open a new development centre to house today’s innovators, we also want to help foster the next generation of inventors by funding a million healthy breakfasts to give schoolchildren the fuel to learn, and expand our bursary programme to help more women get university educations for high tech roles.”

The news was also welcomed by Minister for Digital Matt Hancock and Mayor of London Sadiq Khan.

 

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Mayor of London announces Paris-London Business Welcome programme

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A new Paris-London partnership announced a day ahead of triggering Article 50

Just one day before the triggering of Article 50, Mayor of London Sadiq Khan, and the Mayor of Paris, Anne Hidalgo, have announced a new agreement between Paris and London, aimed at supporting start ups.

The Paris-London Business Welcome programme will aid growing companies to jointly domicile in the two cities, with help to set up including accessing co-working space, local tech ecosystems and discounts on accommodation. Eurostar have committed to providing preferential rates on their services to entrepreneurs.

The programme will also jointly showcase the two cities to overseas investors.

The announcement comes just over seven months after Khan’s deputy mayor for business Rajesh Agrawal revealed that talks on collaborative deals between the two capitals were underway.

JOINING FORCES

Announcing the deal today alongside Paris mayor Anne Hidalgo, Khan said: “London and Paris are two of the greatest cities in the world and we have so much to gain from joining forces.

“Never underestimate the incredible benefits to be found when major cities do business together. Our great friends in Paris and across the continent are well aware that working closely together remains to our mutual benefit.”

The Mayor of Paris, Anne Hidalgo, said: “Paris and London share common values and willpower. We want to be attractive to companies all over the world. Since the election of Sadiq, our two cities have been working better together. We are developing new exchanges and new projects. All these initiatives will create employment, activity and economic growth. It is a very positive dynamic that the Brexit will not change.”

The announcement was made as  part of Khan’s visit to Paris and Brussels, with the London mayor meeting European parliament president Antonio Tajani and European commission president Jean Claude-Juncker today.

As part of the Mayor’s International Business Programme, Sadiq was accompanied on the Paris visit by a trade delegation of 15 fast growing London companies. The companies had the opportunity to showcase their innovations, meet with top investors and explore export opportunities in Paris.

 

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Construction boom in central London

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Building projects in the capital hit eight year high

Construction is at highest levels seen in eight years in central London’s key business districts. The amount of office space currently under construction is at 14.8m sq ft. This is spread across 120 separate projects.

The figures are heartening given the warnings from industry bosses, in particular banking, about pulling out of the city post-Brexit. New business hubs are to be created in Battersea, White City and Stratford, with 65% of the 2.9m sq ft of space pre-let, including the landmark Apple office due to open in the old Battersea Power Station.

Although the amount of office space currently being built is up 4% on six months ago, pre-Brexit, on the downside, there is a marked decrease of new construction projects starting. The volume has fallen by 42% and completion dates have slipped back by three months on average.

Britain’s ambitous building plans, including the new high speed rail line to the north of England, Hinkley Point nuclear plant and third runway at Heathrow, all hinge on the availability of skilled labour, and if the supply of migrant labour is cut off post-Brexit, it could cause further repercussions for building project completion. According to the National Institute of Economic and Social Research, over half the construction workers in London are migrants.

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The evolution of London’s gold market

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After a century of tradition, changes in how gold is traded are on the way

When the precious metals industry meets in Singapore next week for an annual gathering, one of the key topics will be the coming changes to how gold is traded in London.

A new trade-reporting service and the introduction of exchange-traded futures will be the latest developments in a market that until recently remained largely unchanged for about a century. Here’s a timeline of main events over the past 350 years, according to the London Bullion Market Association.

1676

After moving to London from Amsterdam, Moses Mocatta partners with the East India Co. to ship gold to India. The firm he built, the oldest member of London’s bullion market, has today evolved into ScotiaMocatta, part of the Bank of Nova Scotia.

1717

As master of the Royal Mint, Isaac Newton set gold at 4.75 pounds an ounce, a price which lasted two centuries. Gold costs about 1,033 pounds ($1,260) today.

1732

With gold volume rising in London, the Bank of England opened the city’s first bullion vault. By then, almost two-thirds of the world’s gold production was passing through London.

1817

The Royal Mint produced the first gold sovereigns, replacing the guinea, a coin equal to about a quarter-ounce of gold.

1871

The BOE began accepting 400-ounce bars (up from 200 ounces previously) — the traditional size accepted globally today — to meet demand from central banks in Europe for their reserves.

1897

The first silver fixing took place at the London office of Sharps & Wilkins, with dealers Mocatta & Goldsmid, Pixley & Abell, and Samuel Montagu & Co. The daily process used by brokers, mining companies and jewelers to trade and set prices would remain largely unchanged for more than a century.

1919

The first gold fixing took place. Meetings were held in a wood-paneled room at N.M. Rothschild & Sons Ltd.’s offices until the process switched to a telephone conference call in 2004. Dealers who met in the room each had small Union Jack flags to signal the need to change orders.

1934

The U.S. fixed gold at $35 an ounce, with the American assay office buying large amounts of the metal at that price. London’s good delivery list, which set quality standards for gold bars, expanded to include refineries and mints in eight countries.

1985

The London Metal Exchange closed its gold futures market after just three years because of a lack of domestic investor and speculator interest.

1987

The BOE establishes the LBMA, the international trade association representing and overseeing London’s gold and silver market.

2014 and 2015

Silver became the first precious-metal fixing to move to an electronic auction after Deutsche Bank AG withdrew from the old phone system amid a pull-back from commodities. Regulatory scrutiny of how benchmarks are set intensified after traders manipulated Libor rates. Platinum, palladium and gold fixings were also replaced by new electronic auctions.

2016

The LME, World Gold Council and a group of banks said they’ll introduce centrally-cleared gold and silver futures in the first half of next year. Separately, the LBMA picked technology firm Boat Services Ltd. to develop a trade reporting service to boost transparency in the over-the-counter market.

By Nicholas Larkin

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