Deep in the Bank of England, it is located in a network of vaults where cameras are rarely recognized, and it is the second most famous gold land in the world.
Once upon a time, bank safes kept bullion owned by the crown, but these days it mainly serves as a repository for other central and private banks who want to hold this important asset.
However, in recent weeks, fears have been growing that the safe has slowly been empty. It leads to other fears, and banks are struggling to keep up with the leak. It all raises a somewhat ominous question: is the Bank of England running out of money?
Well, the governor told Sky News there was no shortage of money left in the central bank safe, but he has been left over in recent months with billions of pounds of bullion left across the Atlantic. I admitted that.
This move is a symptom of deeper financial problems. Traders are worried about the possibility that Donald Trump will impose tariffs on precious metal movements on the US. The preemptive trade is suddenly rising sharply in the amount of gold held in New York, not just from London, but from other parts of the world.
However, repatriation of money is not easy. Not to mention security, it took time to move inside and outside the safe, and the Gold Rush led to a lack of logistics options. The added complexity is the fact that bank safes are not actually designed to accommodate large-scale influxes and outflows. So simply getting a bar is not easy.
Last week, Lieutenant Governor Dave Ramsden said: “Gold is a physical asset. So there are real logistical and security constraints. It takes time and is very heavy as you know.”
The result is that you’ll be waiting several weeks for someone who wants to remove their money from your bank. This has increased the price of gold in London.
Speaking to Sky News last week, Andrew Bailey said: It’s not New York.
“Obviously, there’s a lot of security and a lot of insurance on the gold movement. So you can’t put it behind every truck and take it. That’s something you need to plan.
“So there are constraints due to physical constraints. But we have all the slots that every gold person wants to come and go.”
The governor asked where the Bank of England still had a lot of money left. “There’s still a lot of money.”
Photo: Reuters
“We are committed to providing a wide range of research services,” said Adrian Ash, research director at Precious Metals Marketplace BullionVault.
“This is a financial market phenomenon, with juice prices increasing, but it had no real impact on the availability of metals.
“London remains the heart of the global gold trading and storage network. Short-term bottlenecks are not new and can only be used to highlight the underlying physical reality of the global gold market.
“However, in the long term, the Bank of England’s role as custody over foreign central banks who want to tap on the London market will be dented. Even amid a surge in central bank purchases in emerging markets, stockpiling in recent years. We have already seen a lower edge of the company. As reserves, managers are concerned about sanctions and other political risks, compared to the West and others.”
