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“No more space for Gold Bars” claims the Swiss news
website in an email AFE’s Simon Heapes forwarded
around to our management group this week. The report went on to suggest that
Swiss banks are fast running out of secure storage space for gold bullion
held by investors and institutions. “Fears of hyperinflation, the
economic downturn and the success of gold index funds (ETFs), which are
supported by physical gold, has led to a run on
precious metals investment - and in gold in particular, and in the necessary
secure storage space in which to hold it.”
One
Swiss bank, earlier this year, reported that it was having
to relocate some of its stored silver bullion to another site to make room
for gold. The Zurich Kantonal bank put this down to
the success of its gold ETF. The website reports another Swiss investment
banker despairing "We have the need to store more gold for our
clients but are finding it difficult to find secure storage facilities". Gold storage makes
high demands on security which is what is making the gold holding task more
difficult. Few banks will divulge exactly where their gold is stored for
security reasons.
Some
of the problems are being handled by improving the storage systems in
existing space. As one banker commented "A 12.5 kilo gold bar only
occupies about the same amount of space as a tetrapak
of milk".
The
report caught my attention. AFE’s vaulting company recently expanded
its Zurich security facilities to easily accommodate our growth in bullion
storage. In my opinion it would be a stretch to imply that Switzerland as a
whole was running out of storage space. AFE’s Alex Stanczyk
added; “I find
the comments regarding Swiss bank vault storage interesting in that the
amount of gold in the world isn’t really changing all that drastically,
we are only adding about 2500 tons per year and less than 400 tons of that is
investment bars according to World Gold Council reports, which means the vast
majority of gold is already vaulted somewhere.
According to the article Simon sent it is flowing into Swiss vaults which means it is coming out of other vaults
somewhere else in the world. The question it may behoove us to ask is; who’s vaults is it coming from, and might it have
anything to do with the flow from western central banks used to manage the
gold price? China, Russia, etc certainly aren’t selling their gold
stocks, they are buying.”
Our
bullion bailment and vaulting procedures has long fascinated our readers and
clients. An early spring Thursday morning, Zurich, Switzerland
: Although spring is slowly arriving, you wouldn't think it, stepping
out into the icy cold morning
air. Pockets of snow can still be seen all around this pristine, clean city.
We make our way by cab from Bahnhofplatz, over the Limmat River and towards the Airport district of Kloten. "We'll have our work cut out this morning"
I mumble to my helper,
mostly thinking out loud. In heavy traffic, the route taken by our taxi is
well familiar; in-fact this is the second large bullion bailment in just a
few months. Today we will be auditing and bailing into the vault several
metric ton of silver bars, and tens of thousands of
oz's more of gold.
As
always, security at the vault company is extremely tight. For AFE, each
bullion bailment represents several weeks of orchestrated planning, together
with the co-ordination of numerous bullion swaps through several Bullion Banks, our
point of delivery Refinery, the Security Transport and Vault companies, an
Independent Trustee company, Swiss Customs officials and the attending
Auditor.
We
stand briefly in the cold, as the large security door is electronically
unlocked and opened, allowing us access to an internal secure holding area.
At least four days earlier we have confirmed the full names and passport numbers of those who would be
attending this morning, and this has been independently confirmed and authorized
by a independent, 3rd Party Trustee company (1). After a couple of minutes we are joined by
the auditor representing the Trustee company (2). A security guard meets us, checks our ID's
and then, one by one, logs us through another security door and then quickly
guides us through several corridors to a small office. In the office, our
passports are checked again and referenced with their files and this week's
authorization letters. All being in order, we are signed into the book and
issued security passes.
We
are escorted down several flights of stairs, through yet more heavy steel
doors, and into the high security section of the building containing several
large underground vaults with interconnected loading bays.
Late
Wednesday afternoon, several armored security trucks had made the trip from
the refinery in Mendrisio to Zurich and delivered
to the vault over 6 metric ton of 1,000 oz (32 kg) silver bars and a batch of
400 oz (12.5) gold bars (3). Over the next few hours, both I and the auditor,
independently of each other, will site and verify each one of several hundred
bars, their hallmark and bar number, and reference the bars to the refinery's
'bar list'. Each bar is then 'bailed' into pallets, each pallet closed,
wrapped, locked and sealed under several numbered seals. Each seal number is
verified and recorded by both myself and the auditor.
Finally
as this bailment process is completed, the audited, locked and sealed pallets
are moved from the loading dock over into the long-term underground vault. At
dinner later that night my BlackBerry chimed as I received AFE's Daily
Treasury Price Fix for the US markets; both gold and silver making 25 years
highs (4). "A
good feeling, having just locked several million dollars of bullion safely
away in the vault," I commented to my dinner companion.
Best Wishes in Wealth
Philip Judge
Anglo Far-East
Company
Philip Judge is the 3rd
generation of a family that has had substantial involvement in the Precious Metals
markets. He has researched, written and spoken on the gold, silver and
commodities markets for over a decade. Philip works in the marketing and
operations department of The Anglo Far-East Bullion Company, an
internationally based Bullion Banking, Investment Management and Financial
Services Company
Doug Casey est contributeur à 24hGold.com. Les
vues présentées sont les siennes et peuvent évoluer sans
qu’il soit nécessaire de faire une mise à jour. Les articles
présentés ne constituent en rien une invitation à
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