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Gold market mulling blockchain to secure $200bn of supply

Gold is going digital.

Blockchain technology may help keep track of the roughly $200 billion of the precious metal dug from remote mines, traded by middlemen and melted down by recyclers that’s sold each year to buyers scattered around the world.

The London Bullion Market Association, which oversees the world’s biggest spot gold market, will seek proposals including the use of blockchain for tracing the origins of metal, partly to help prevent money laundering, terrorism funding and conflict minerals, according to Sakhila Mirza, an executive board director.

“Blockchain cannot be ignored,” Mirza, also general counsel of the LBMA, said in an interview Monday. “Let’s understand how it can help us today, and address the risks that impact the precious metals market.”

Markets in commodities from crude oil to diamonds and even tomatoes are looking at using the digital ledger technology that underpins cryptocurrencies like Bitcoin -- known to some as "digital gold" -- to track ownership. Tracing gold supply is key to preventing metal that funds armed conflict from entering world markets, identifying owners and maintaining security from mine to vault.

The LBMA has pushed ahead with efforts to modernize a trade that until recent years relied on phone auctions to set a key benchmark price for the market.

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MARKET SUMMARY

INDICES

Name Last Change
DOW 25840.20 0.32%
S&P 500 2753.17 0.75%
NASDAQ 7864.27 0.55%
TSX 16371.05 0.24%
TSX-V 687.36 0.00%

Resource Commodities

Name Last Change
Gold 1187.88 0.27%
Silver 14.73 0.20%
Copper 2.66 0.040
Platinum 796.50 0.13%
Oil 66.43 0.78%
Natural Gas 2.94 0.17%
Uranium 25.80 1.71%
Zinc 1.08 0.00%

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