Where Gold Trade Goes If London Loses Its Grip

London is facing challenges on multiple fronts to its centuries-old status as the place where the world trades gold. Two U.S.-based exchanges, CME Group Inc. and Intercontinental Exchange Inc., have created new ways of buying and selling precious metals. So has the London Metal Exchange. Trade volume in New York is rising, and China, where most of the metal ends up, is giving investors new ways to bet on gold’s price. All of this is a threat to London’s over-the-counter market, historically the leading player in global trade of bullion.

It’s been that way since Moses Mocatta moved to London from Amsterdam and then, in 1676, partnered with the East India Co. to ship gold to India. The Bank of England, established in 1694, became a central player in the gold trade, and refineries sprang up nearby in London’s financial district. London’s workday, which overlaps that of New York and Hong Kong, is a plus, as is the U.K.’s long history of respecting property rights. Gold trading remained largely unchanged through centuries: Deals are still often struck on a virtual handshake.