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An Inside Look at the World’s Biggest Paper Gold Market

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Every day, there are a whopping 5,500 tonnes ($212 billion) of gold traded in London, making it the largest wholesale and over-the-counter (OTC) market for gold in the world.

To put that in perspective, more gold is traded in London each day than what is stored at Fort Knox (4,176 tonnes). On a higher volume day, amounts closer to total U.S. gold reserves (8,133.5 tonnes) can change hands.

How is this possible?

The infographic below tells the story about gold’s foremost trading hub, as well as the paper gold market in London, England:

Gold's Secretive Price Discovery Market: Inside London's Vaults

Image courtesy of: BullionStar

London is dominant in global price discovery for gold.

In 2015, it accounted for roughly 88% of gold trade – most of which occurs between banks on behalf of their clients. Further, 90% of London trade is spot trading, which further emphasizes London’s importance in price discovery for gold markets.

While the high-level details of the market are visible, the individual mechanisms behind the London gold trade are less clear. There is very little detailed information provided on physical shipments, outstanding gold deposits or loans, allocated or unallocated gold, or clientele types. Trade reporting also breaks down at a more granular level, and datasets on the GOFO (Gold Forward Offered Rate) were also discontinued in January, 2015.

Almost all gold (95%) traded in London is unallocated and without legal title. This makes it easier to trade, but it also raises concerns about a market that is opaque to begin with. There are 5,500 tonnes of paper gold exchanging hands on paper each day, but there are only 300 tonnes of gold vaulted in London outside of the reserves for ETFs or the Bank of England.

What would happen if there was ever even a small rush to get the physical asset behind the paper? Is there a system in place for such an event, and how does it work?

Original graphic by: BullionStar

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Mining

White Gold: Mapping U.S. Lithium Mines

In this graphic, Visual Capitalist partnerered with EnergyX to explore the size and location of U.S. lithium mines.

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Teaser graphic of a map that shows the sizes of the top U.S. lithium mines.

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The following content is sponsored by EnergyX

White Gold: Mapping U.S. Lithium Mines

The U.S. doubled imports of lithium-ion batteries for the third consecutive year in 2022, and with EV demand growing yearly, U.S. lithium mines must ramp up production or rely on other nations for their supply of refined lithium.

To determine if the domestic U.S. lithium opportunity can meet demand, we partnered with EnergyX to determine how much lithium sits within U.S. borders. 

U.S. Lithium Projects

The most crucial measure of a lithium mine’s potential is the quantity that can be extracted from the source.

For each lithium resource, the potential volume of lithium carbonate equivalent (LCE) was calculated with a ratio of one metric ton of lithium producing 5.32 metric tons of LCE. Cumulatively, existing U.S. lithium projects contain 94.8 million metric tons of LCE.

RankProject NameLCE, million metric tons (est.)
1McDermitt Caldera21.5
2Thacker Pass19.1
3Tonopah Flats18.0
4TLC Lithium10.7
5Clayton Valley (Century Lithium)6.3
6Zeus Lithium6.3
7Rhyolite Ridge3.4
8Arkansas Smackover (Phase 1A)2.8
9Basin Project2.2
10McGee Deposit2.1
11Arkansas Smackover (South West)1.8
12Clayton Valley (Lithium-X, Pure Energy)0.8
13Big Sandy0.3
14Imperial Valley/Salton Sea0.3

U.S. Lithium Opportunities, By State

U.S. lithium projects mainly exist in western states, with comparatively minor opportunities in central or eastern states.

StateLCE, million metric tons (est.)
Nevada88.2
Arkansas4.6
Arizona2.5
California0.3

Currently, the U.S. is sitting on a wealth of lithium that it is underutilizing. For context, in 2022, the U.S. only produced about 5,000 metric tons of LCE and imported a projected 19,000 metric tons of LCE, showing that the demand for the mineral is healthy.  

The Next Gold Rush?

U.S. lithium companies have the opportunity to become global leaders in lithium production and accelerate the transition to sustainable energy sources. This is particularly important as the demand for lithium is increasing every year.

EnergyX is on a mission to meet U.S. lithium demands using groundbreaking technology that can extract 300% more lithium from a source than traditional methods.

You can take advantage of this opportunity by investing in EnergyX and joining other significant players like GM in becoming a shareholder.

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