China's Largest Bank Is Mystery Buyer Of Massive 1,500 Ton Gold Vault In London
Back in June 2013, when Deutsche Bank opened a gold vault in Singapore which could hold up to 200 metric tons, the German bank was euphoric about the prospects for storing physical gold: "Gold has traditionally been stored in London, Zurich and New York, but there is a serious shift in dynamics going on as the global financial crisis continues to evolve," Mark Smallwood, Deutsche Asset & Wealth Management's head of wealth planning in the Asia-Pacific region, told The Wall Street Journal.
This is what the outside, and inside, of the state of the art Singapore vault looked like:
Mark was correct and thanks to the ongoing decline in gold prices, Chinese and Indian demand for the metal, the physical metal that is, not its various paper manifestations, has risen to record levels. Alas, one thing Mark did not know is that in early 2014, a German regulator would reveal that "precious metals manipulation was worse than the Libor scandal" and as a result the largest German bank (and largest bank in the world by notional derivative exposure) - which has been probed and found guilty for rigging virtually every market, including gold - would quietly liquidate its entire physical precious metals trading group.
Which meant that Deutsche Bank's Singapore gold vaul, was about to be sold.
But while the sale of DB's Singapore gold vault was to be expected with China's ravenous apetite for warehousing physical gold around the Pacific Rim, what may have escape popular attention is that Deutsche Bank's even more massive, and even newer, gold vault in London was also "on the block" as of December 2014 when we reported that Deutsche Bank is "open to offers for its London-based gold vault following the closure of its physical precious metals business." As Reuters noted: "If the right offer came along, then the bank would sell the London vault," one source close to the situation said.
Most curiously, the bank's London gold vault only became operational in June of 2014, more than two years after launching the project. It can store some 1,500 tonnes of gold and was built and managed by British security services company G4S.
As Reuters further noted, with other banks withdrawing from the commodities business to cut costs and reduce their regulatory burden, it might be difficult for Deutsche Bank to find buyers amongst its nearest peers. However, one possible buyer is general LBMA-member, Chinese bank ICBC, which we said at the end of 2014, was trying to build a presence in London.
In any case, the list of potential buyers for DB's brand new vault lease remained a mystery, and perhaps our revelation of the exact location of this vault, something potential buyers tend not to appreciate especially when said vault will house up to 1,500 tons of gold, or over $50 billion worth of "inventory", may have dissuaded some. As a reminder, the "secret" location of the Deutsche Bank vault, which as revealed in the G4S building application, is located in the Park Royal complex, and specifically at the 291 Abbey Road, London NW10 7SA location.
As it turns out, one persistent buyer failed to be dissuaded.
According to Reuters, as was rumored one year ago, China's largest bank - and in fact the world's largest bank - by assets, ICBC Standard Bank, is buying the lease on Deutsche Bank's London gold and silver vault, enlarging its footprint in the city's bullion market, four industry sources close to the companies told Reuters.
China's ICBC, which took a controlling stake in Standard Bank's London-based Global Markets business last year, has also applied to become a clearing member of the London gold and silver over-the-counter business.
From Reuters:
The Chinese and South African lender is aiming to fill the gap left by Western banks, which are retreating from commodities to cut costs and reduce regulatory burden. "They (ICBC Standard Bank) have taken on the lease for the vault," the first source said.
Currently, five banks - JP Morgan, HSBC, Bank of Nova Scotia, Barclays and UBS - settle daily bullion transactions between dealers, amounting to more than $5 trillion worth of metal each year in the London over-the-counter market.
These banks are shareholders of the London Precious Metals Clearing (LPMCL) company. They will decide whether to accept or reject ICBC Standard Bank's application within the next few months. The LPMCL declined to comment.
"They are applying for clearing membership at the moment, but that's still subject to a vote, which has not taken place yet," the source said.
Should the vote go in its favor, ICBC will be ready with what may be one of the largest gold vaults in London, if not the world, to park local gold which will then be promptly shipped over to the mainland to be dealt with as seen fit. Unless, of course, the vault is there for the reverse migration: to house quietly escaping Chinese gold as part of the local oligarchy's attempts to circumvent China's capital controls, a task so far accomplished relatively painless with bitcoin.
Only time will tell.
What is perhaps most surprising is how cheaply ICBC acquired the massive gold vault: "The figure that was initially talked about may have been around $4 million, but it's way lower now," a second source said, without disclosing the figure paid for the vault.
So what does "way less" than $4 million buy you nowadays? Here is the answer, courtesy of Google Maps:
Finally, for those curious, here is precisely where the brand new gold vault of the world's biggest bank will be located.
(17 votes)
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G4S...a truly evil company that runs prisons and detention centers
And incredibly incompetent to boot. Good luck hiring these morons to guard the warehouse.
I know exactly where this is in Park Royal. It's a huge industrial estate that's deserted outside office hours, a strange mixture of decrepit old buildings from the 60's and new ones that's popped up during the past ten years.
If the Chinese are playing the London commodities market expecting full delivery of their purchases instead of the usual paper pushing bullshit, then the MIC will have to invade a few more countries to steal their gold to fulfil the orders. They should have just bought Baird's instead with their stock of gold and secure premises.
Indeed they are evil. And they're only nominally British, too. If you dig about half an inch deeper you'll find they are Israeli. Wheels within wheels
hmm--if all of the above ground gold fits in an olympic swimming pool, how does that fit in with vaults like this one around the world?
You are operating on the premise of all "known gold"...
There is lots of air between bars so it looks like the pile is much much larger.
You're not understanding the storage business at all. Each cubic foot of gold requires 200 cubic feet of space to store the documents with claims on that gold. There's no sprinkler system of course because if there's a fire all the claims would burn and the molten gold would drain into a hidden chamber below.
No evidence, no court case.
Funny! Of course, there's a kernel of truth to every good bon mot . . .
http://www.zerohedge.com/news/2012-11-15/dtcc-provides-update-status-flo...
Good link Bling, and what's not widely understood is that this group rents "ownership" to those short. The fraud is everywhere.
We all live in a Golden Submarine. A Golden Submarine. A Golden Submarine.
So, we've all sunk to the bottom of the sea.
Probably some time this year.
Actually it's a Goldman submarine...
I see anoter "Die Hard" movie in our future........
A Good Day To Die With A Gold Finger In Your Ass
that will be a blockbuster...
1/2" steel bars are supposed to keep me out? please... the security door in photo # 2 is pointless the bars adjacent to the door literally do nothing. And the doors themselves look weak to begin with.
I wouldnt put any sizable amount of gold in there, the government / any determined criminal could burst through that vault in about 15 minutes with a team of 12 or less people.
I was surprised to see access to door hinges from the outside. The door hinge covers are probably made out of tungsten or something but still.
2 - 3 assault rifles, a sizable truck and motorized carriage, 2 bolt cutters , one gas powered cut off with a dozen spare blades...boom.
But lets be honest here, in todays world your gold is stolen the moment you trust someone else with it, you put your gold in the vault and all of the sudden its derivitized and poof 20 people have a claim on your gold and you are labeled an unsecured creditor due to the microscopic fine print on the bottom of the storage contract ^^....
Wait for the EMP then pull your gas drive plasma cutter out of the faraday cage...lol Of course at that point somebody would probably just use explosives.
Why not send in twin ferrets with laser beams on their helmets?
The challenge is not in the ripping off, the challenge is in the getting away.
Good catch Ms No ! I guess only a carpenter who has installed exterior doors, with security hinges, would get your joke.
That would hold a lot of paper shorts.
What the hell is going on? Why would they do that? Certainly with the way the West has been treating the assets of Russian citizens the Chinese should be leary of doing any business with London. Are they just trying to gain access to move metal to China?
They (The Chineese) are going to be building half of the UK Infrastructure soon. Why not store it all here.
the three gurus like the triplets?
Maybe plans for two more vaults?
They (The Chineese) are going to be building half of the UK Infrastructure soon. Why not store it all here.
They (The Chineese) are going to be building half of the UK Infrastructure soon. Why not store it all here.
You do know that more than 3 people can read your post at one time. Correct ??
If you don't hold it in china, you don't own it.
That doesn't strike me as a particularly secure location. Cement mixer with a battering ram, and a fast getaway car?
With 1,500 tons of gold in the trunk?
At current prices, $1 million is 62 pounds. $10M would be easily transportable in a passenger car, and way easier to liquidate.
And there is a convenient 'car supermarket' on t'other side of the fence.
If I were Chinese I would not store my gold in China. I am uncomfortable storing it in my pond in Amerika.
The new MINI holds more gold than the old Austin mini you're obviously thinking of.
For tradition's sake...
4 million for rent or ownership?
If that's the lease rent I'd be worried about them paying the rent with my share.
KOOL...
im sure Gaddafi's stolen Gold that the US has been forced to hand over to China will be safe there....
could you post the blueprints please :)
Thats Marc Faber's personal vault !
Tungsten bars go to London, the real stuff stays home.
The real stuff is in the secret vault below the Knesset.
All else in Tungsten, except for my stash which I tested. Of course, Punjab lost it crossing RR tracks near the farm. I'm in India trying to source moar.
A healthy Perth Kangaroo hopped onto the porch yesterday. I sent Hanu to capture it.
Amazing the amount of security required for a worthless metal. Isnt that what Bernanke and the rest of these liars have been saying?
Isn't G4S an Israeli firm? I bet the gold is long gone...or will be when the time is right
so, the recent Yuan are crashing because it is backed by gold?
LBMA vault about to be emptied.
China will exchange yuan for gold after british pound crashes...
"hey mate, spare a yawn?"
You will, indeed, want easy access to your gold if you survive "Duck and Cover."
When gold consfication in the UK becomes a reality then it makes no difference if its chinese barracading this vault rather than DB. I will keep all my gold where it is stuffed up my bumhole. I havent got an lot to hide but over time I will accomodate an ingot im sure.
Another Dubai in the making? Or is the gold stolen from Dubai being moved to London? Great place for it, so conveniently close to The City. And you have to ask: How many potential re-hypothetcation sites are close by?
The Dubai gold has to be melted down to remove traces of former ownerhip, so what better place to hide it until then than right in plain sight?