New Vault Promised from Barclays Capital

Posted by admin on Monday, September 19th, 2011

With concerns over debt, currency stability, inflation, and equity valuations continuing, it looks as though gold will post a gain once more this year. This would be the 11th straight year of gains for the metal, and the longest consecutive annual winning streak since at least the 1920’s.

With this backdrop, investors are shunning equities and currencies and opting to build up their holdings of physical gold and silver. Larger investors need safe places to store their investments of precious metals, and already the Brink’s Co. have opened a vault in London to cope with increased demand for this service and is considering building another.

Now, Barclays Capital has announced that they are bowing to pressure from their clients and will be following suit.

Investors around the world own over 2,000 tonnes of gold, through holdings of Exchange Traded Funds. Barclays Capital is one of the largest traders of such funds, and so it is natural that they should have a safe storage facility.

Typically, gold stored in vaults is to a certain standard, which the London Bullion Market Association (LBMA) calls ‘good delivery standard’. Such gold bars are 99.5% fineness, and include a serial number, refiner assay, and manufactured year marks.

London vaults are within the M25, and due to their exacting requirements take some time to build. For example, the Brinks’s above ground facility took nearly two years to complete, and cost millions.

Such considerations are a clear indication that Barclays Capital, Brinks, and their respective clients, expect the bull run in the precious metals to continue. This bull market has seen recent all time highs in the gold price and a trebling of the value of silver in the last three years.

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