How much gold is there in London – and where is it?

The world’s biggest bank has agreed to buy a vault for
gold and precious metals in London. But how many of
these vaults are there, and how much gold do they hold,
asks Claire Bates?
The streets of London may not be paved with gold, but there
is certainly a huge amount stored underneath them. About
6,500 tonnes is stored in seven vault-systems under the city.
The largest by far lies in the Bank of England. It holds three-
quarters of the gold in London, or 5,134 tonnes. Most of the
gold is stored as standard bars weighing 400 troy ounces
(12.4 kg or 438.9 ounces) – there are about 500,000 of them,
each worth in the region of £350,000.
But the official reserves of the UK Treasury account for less
than a tenth of this.
“Just 310 tonnes of the gold in the Bank of England is from
the UK Treasury, the rest is mostly commercial,” says Adrian
Ash of
The gold is held in a system of eight vaults over two floors
under Threadneedle Street in the City. This is to spread the
weight and prevent the vaults from sinking into the London
clay beneath the bank.
There are six smaller commercial vaults inside the M25,
owned by banks like JP Morgan and HSBC. Three are around
Heathrow Airport.
The vault bought by ICBC from Barclays is one of these
vaults within the M25, but its exact location is secret. It holds
2,000 tonnes, making it one of the largest in Europe. It is
reported to have taken a year to build.
According to Adrian Ash, a host of private concerns hold
gold in London’s vaults. “It will be investment funds, hedge
funds, wealthy families, trust funds that are backed by gold,
that kind of thing,” he says.
The Bank of England’s vault is the second largest in the
world behind only that of the New York Federal Reserve,
which holds about 6,300 tonnes.
“London is interesting as it doesn’t produce gold or refine it,
nor is there much consumer interest. However, it is the
centre of the wholesale gold market. It’s the fourth-largest
importer of gold and the second largest exporter. When you
request a price of gold it is given as ‘Loco London’ – the price
of gold delivery in London, which is the baseline,” says Ash.
“This is because the UK time zone is between Asia and the
US, it has a historic connection to the gold standard and a
strong history of property rights, political stability and free
trade. It also has good vault facilities.”
The Barclays vault bought by ICBC is not thought to have
been emptied before the sale.
“My understanding is that it’s being bought as a going
concern, they haven’t just taken over an empty vault,” says
The investors, jewellers, mining companies and others
storing their gold in vaults such as these will now pay pay
ICBC instead of Barclays for the privilege.
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like that size.
How much gold is there in the world?