When the financial crisis took a hold on world markets, inflation increased along with the significant increase in new mainstream politics. In these times, two major companies plan to open massive vaults in Europe. These locations will be able to safely hold more than 100 million euros (112 million USD) in pure gold. Their customers are offered low costs compared to exchange-traded products as well as protection from the price hike.
Inflation & Political Instability are a Major Risk for Customers
The price hike, technically known as inflation, is forcing many people to protect their valuable non-cash assets like gold. The thing about having a safe haven asset is not just the purchase. These assets require specialized storage facilities.
Conditions that could lead to political instability and unrest cause people to keep their assets even safer. Recently, the biggest conditions have been the UK’s decision to leave the European Union and the election of Donald Trump as President of the United States of America. The two incidents, in particular, have greatly influenced the global financial markets.
On the other hand, negative interest rates have been observed across Europe. The negative interest rate has persisted across countries in Europe. Inflation has continued to show an increase, causing major threats to coupon payments by bonds. All of these incidents have significantly led to storing wealth in vaults made of tempered steel.
New Secure Vaults in Construction
Currently, looking at the lucrative market for secured storage facilities, CoinInvest, a major Europe based gold trader, is negotiating the construction of a massive 100-square meter vault. The vault will have the capacity to hold more than 100 million euros worth of gold. The weight of the safe is an estimated 82 metric tons. The door alone will weigh about 1.5 tons.
Hike in Gold Storage
Bullionvault.com is one of the largest online portals that deal with physical gold trading. According to the information provided by Bullionvault.com, the company successfully added 3 tons of gold in the past year.
This brings their combined gold holdings to about 38 tons, which is worth 1.5 billion USD at the current market rate. The company has different secure locations housing high security storage facilities for gold. The vaults are located in New York, Zurich, Switzerland, Singapore, London, and Toronto.
Gold reserves at the Bank of England, the corporation that operates one of the largest commercial vaults in the world, significantly increased. The Bank of England witnessed a 6% increase in its gold reserves in 2016, taking it to about 5,067 tons. The central bank currently holds the gold for the UK Treasury, private banks, and other companies.
Despite the fluctuation in gold prices, companies and banks understand the value and importance of gold. The value of gold is never going to be zero; this is the main reason why there is a major increase in demand for secure vaults for storing gold.
Major companies that provide vaults are reaching their full capacity at a very fast speed. The demand for having secure vaults for gold is causing another gold rush that is likely to see an end soon. Gold worth millions is being traded back and forth as a secured monetary payment. Experts believe that there are more and more people and companies that are willing to save their gold, as the financial future seems volatile.
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