July 24, 2024

Hong Kong’s Secret $50 Billion Gold Bullion Vault

Bloomberg TV asks Where do you hide $50 billion of gold in Hong Kong?

The location is secret but the reason for building a new massive bullion vault in Hong Kong is not.  According to Bloomberg, the decision by Malca-Amit to build the bullion vault was based on unrelenting physical demand for gold in Asia.  During 2011, gold demand in China increased by 20%.  In addition, customers vaulting their holdings want the gold to be kept close to home.

The new gold bullion vault is designed to hold 1,000 metric tonnes of gold, worth about $51 billion at today’s price.  The vault already holds 2,400 tonnes of gold owned by gold exchange traded funds (ETF).

Beyond its importance as a storage location, the massive amount of gold holdings that the vault will eventually hold signals a fundamental change for the gold market.  The massive holdings of Asian gold will shift price setting action away from the London and the U.S. exchange cartels which dominate and manipulate gold pricing.