London’s vaults held 596,000 gold bars worth £227 billion as of March 2017, aside from $19 billion of silver bars safely locked away, according to the London Bullion Market Association (LBMA).
The LBMA aimed to disclose the amount of precious metals to entice more investors to buy or sell gold and silver, as well as provide more transparency on just how much gold is stored in the city.
The amount of stored gold further highlighted London’s status as the largest trading centre worldwide for such commodity. For the first time, the market caught a glimpse of the scale of stored resources that reached around 7,500 tonnes of gold in March. Worldwide, there are an estimated 187,200 tonnes of gold stored above the ground, according to a Thomson Reuters survey.
While it has been public knowledge that the Bank of England holds more than 60 per cent of gold and silver bars in London, the new data showed holdings of private companies. These institutions included investment banking firms such as HSBC, JP Morgan, and ICBC Standard Bank.
The LBMA’s report not just provides better transparency for private holdings of gold resources, as it also offers better accuracy in tracking any movement in the economy. For instance, a decline in holdings could signal a weaker confidence in the economy.
There already plans to publish the report each month, according to LBMA CEO Ruth Crowell. As much as £13.8 billion of gold trading happens each day in London, which is a monthly report would then provide investors with a better analysis of the market.
Gold trading in London can be a lucrative form of investment. Like any other type of asset class, you should only transact with reputable dealers like Atkinsons Bullion whether you plan to buy or sell gold and silver.