Barclays new vault opens for gold
By Amanda Cooper
LONDON (Reuters) - Too much gold and just nowhere to put it? A high security solution to bullion storage issues is at hand at a secret location somewhere inside London's orbital motorway - the first British bank-owned gold vault to open in over five years.
Barclays (BARC.L: Quote) new vault anticipates demand from pension funds, central banks and sovereign wealth funds who have been scooping up the precious metal that has doubled in value since late 2008.
Precious metals storage has shaken off its dusty image, emerging as a lucrative business. Gold is preparing for a twelfth consecutive annual price rise against the backdrop of a flagging global economy and the debt crisis that has engulfed Europe.
London is the heart of the over-the-counter precious metals market, where millions of dollars in trade are cleared and settled daily, the benchmark prices for gold, silver, platinum and palladium are set and where thousands of ounces of metal are stored.
Barclays, which quotes metals prices and clears over-the-counter trades, says the decision stemmed largely from its customers' desire to have all aspects of their investment in precious metals handled by one firm.
"Of the six (London) clearing members, only two have their own vault and we are the first bank to go out and build their own vault in over five years, which feeds back to it really being in response to client demand," Jonathan Spall, product manager for metals at Barclays, said in an interview.
"For many years, vaulting wasn't particularly interesting. It has changed dramatically along with why people want to do it. Ten years ago, people were not that bothered about gold or what it was or where it was held, but now they are very bothered."
The prospect of the U.S. Federal Reserve pumping more money into the economy through purchases of bonds to encourage job creation has been instrumental in unleashing fresh demand for gold and other precious metals. Continued...