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Gold April 01, 2020 12:30:22 PM

London Banks to Expand Gold Storage Locations

Paul Ploumis
ScrapMonster Author
The five banks- HSBC, JPMorgan, Scotiabank, UBS and ICBC Standard- account for clearing of gold trades worth nearly $30 billion every day.

London Banks to Expand Gold Storage Locations

SEATTLE (Scrap Monster):  Five banks in London dealing with clearing of gold trades announced that their network of gold storage locations will be expanded to other countries. The move is aimed at addressing the risk in physical gold deliveries due to disruption in international flight services due to travel restrictions placed by countries on account of COVID-19.

The five banks- HSBC, JPMorgan, Scotiabank, UBS and ICBC Standard- account for clearing of gold trades worth nearly $30 billion every day.

The shutdown of major metal refineries along with air travel restrictions have resulted in sharp up move of gold prices in New York and London, on fears of disruption in gold movement from London to New York towards settlement of contract obligations. It must be noted that several of the London Bullion Market Association (LBMA) good delivery refiners including three in Switzerland have suspended operations. In addition, South African Rand Refinery has announced notable reduction in output.

Meantime, the LBMA noted that it looking at the feasibility of global delivery outside of London. The vaults operated by the banks in those countries as well as the storage run by other companies including refiners will be considered, it said. Further, it is also in consultation with refiners, shippers and banks on the possibility of arranging chartered or cargo flights for gold delivery.

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