From Good Delivery bars to Kilobars – The Swiss Refineries, the GFMS data, and the LBMA

Jon Blogosphere, Gold, Market Commentary, Precious Metals, Silver

In early September 2015, I wrote an article titled ‘Moving the goalposts…. The LBMA’s shifting stance on gold refinery production statistics’, in which I explained how the London Bullion Market Association (LBMA) had, on Wednesday 5 August, substantially lowered its 2013 gold and silver refinery production statistics literally a few days after I hadcommented on the sizeable figure of 6601 tonnes of 2013 refined gold production that the LBMA had previously published in May 2015.
Specifically:
On 5 August, the LBMA substantially altered and republished Good Delivery List gold and silver refinery production statistics in two of its published files: LBMA Brochure Final 20120501.pdf and LBMA Overview Brochure.pdf For gold, the alterations were most pronounced in the 2013 refined production figure which was reduced from 6601 tonnes to 4600 tonnes, i.e. a 2001 tonne reduction Other years’ figures for refined gold refinery output (2010-2012) were also reduced, with the 2008-2009 figures being increased As part of the update, the LBMA linked its amended figures solely to GFMS estimates of gold mining andscrap output, adding the words ‘estimated to be’ in front of the 4,600 tonnes figure, and the words ‘owing to recycling of scrap material’, thereby framing the revised figure solely in terms of scrap gold in excess of 2013 gold mining supply. This use of GFMS data is bizarre because all refiners on the LBMA’s Good Delivery List provide exact refinery production statistics to the LBMA Executive as part of the LBMA Pro-Active Monitoring programme, so there are no need to reference estimates from external data providers In the updated versions of the brochures, the LBMA made no reference to why the gold figures had been reduced, nor what the original figures referred to, particularly for the huge difference of 2,000 tonnes of gold refinery output in 2013 between its two sets of figures By 12 August, the LBMA had again updated its 2013 gold refinery output figure to 4579 tonnes In my Part 1 article, I had concluded that:

This post was published at Bullion Star on 23 Nov 2015.