EBS, the world's leading provider of FX and precious metals electronic trading and market data, has joined forces with its EBS Prime Banks to extend access to electronic trading in gold and silver, as an alternative to voice broking for the interdealer market.
In response to increasing interest in trading gold, EBS has reached agreement with three EBS Prime Banks - Deutsche Bank, JP Morgan and Royal Bank of Scotland - to provide access for their EBS Prime Customers, to trade gold and silver.
This capability to enable gold trading through EBS Prime has been made standard functionality for all EBS Prime Banks, in addition to the ability to trade the major FX currency pairs.
EBS is the leading electronic broker in spot gold through the Loco London market, trading a daily average of 500,000 ozs in gold and 4 million ozs in silver on the EBS Spot Dealing System. While EBS Spot prices are pre-screened for credit, the new arrangement will enable EBS Prime customers - interdealer banks with limited counterparty credit - to access credit and trade precious metals on the EBS system.
Announcing the news at the LBMA Precious Metals Conference, in Shanghai, Darryl Hooker, EBS and LBMA Public Affairs Committee Member, said: "This is a pivotal development for the precious metals interdealer network and offers a clear alternative to voice broking for those customers who have previously been unable to access the electronic market on EBS Spot, giving them greater certainty of trade.
"We are very pleased to have reached agreement with these banks to provide this additional services to the precious metals interdealer community.
"EBS pioneered electronic trading for metals in 2000 and since then we have experienced an increasing demand for the electronic gold trading. Traded volumes for gold is on the increase, as a faltering dollar and runaway oil prices have made the metal an alternative to the dollar for investors.
"We have long been known as an electronic trading system for precious metals market makers. The enhanced EBS Prime offering is an offering for those dealers for whom metals trading may not be a really core part of their business, or which have previously been limited by weaker credit. This will give them access to the largest liquidity pool of precious metals."
Customers trading gold and silver on EBS Spot have access to the optimum prices and opportunity to improve their competitive position. The service is expected to be of particular interest to dealers in banks from emerging and developing markets, with an interest in gold trading and using the optimum electronic trading system.
EBS' research has shown that precious metals traders universally regard price, depth and liquidity as being of paramount importance. EBS Spot offers single screen access to all the major currencies, with exceptional liquidity for precious metals.
According to figures from the London Bullion Market Association (LBMA) [London Bullion Market Association clearing turnover, 2004,] year-on-year, gold trading clearing volumes have been higher across the board. Ounces transferred in 2004 to date have risen 13%, value is 25% higher and the number of transfers has increased by 9%.
This year has also seen the first time gold measures have increased from June to July since 1999, with gold ounces transferred rising from a daily average of USD 13.8 million to USD 15.1 million.[London Bullion Market Association clearing turnover, 2004,]
Recent sentiment for the commodity is believed to have been buoyed up by news from the World Gold Council that Argentina purchased 42 tonnes of gold in the first half of 2004.
Global FX market prices distribution relies on EBS Spot for spot data on the major traded currency pairs for gold, XAU/USD (Gold/US dollar) and silver, XAG/USD (Silver/US dollar). As EBS Market Data is fed from the EBS Spot dealing platform, it is a true reflection of the precious metals market at a given time, which delivers a superior market advantage to customers.