Swiss banks running out of storage space for gold bullion

Worries about the global economy and the success in marketing gold ETFs has seen Swiss banks finding difficulty in meeting secure storage requirements for gold bullion.

LONDON - 

In a note entitled No more space for Gold Bars, Swiss news website 20 Minuten Online reports that Swiss banks are running out of secure storage space for gold bullion held by investors and institutions in their vaults.  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.

Another banker reported that his bank still had space but that it is beginning to run out.

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".

While the big U.S. based ETF, the SPDR Gold Trust has recently seen a relatively small decline in its gold holdings with some investors seeking better returns in the markets, the ever-cautious Swiss seem to be seeing continuing growth in locally managed ETFs.  A recent report noted that Swiss Bank, Julius Baer, for example, was still seeing a 3.3% growth in its gold ETF in the current week.  And even though the Swiss Central Bank has been selling gold via the Central Bank Gold Agreement, it still holds 38% of its foreign exchange reserves in the yellow metal.

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responses to this article

Gold storage space What utter baloney. A cube 2x2x2 meters of gold contains 8x19,300 kg = 154,400 kg or about 4,940,000 ounces. Almost $5 BILLION DOLLARS worth. by Carl on July 17 2009, 08:19 Find this comment inappropriate? Report it

Swiss banks running out of storage space for gold bullion Riiiiiiiiiiiiiiiiiiiiiiiiiiiiiight... and Texas is running out of pasture for cattle. The Swiss will run out of vault space on December 22nd, 2012, when the pole reversal causes the Danube to flow into Lake Geneva. The Swiss will . .more have no room for gold the day after the Sahara has no more room for sand. The Swiss have run out of vault space, and Victorinox has stated that they have reached the limit of tools possible in one knife, henceforth Swiss banks will accept no more deposits of bullion - and no more chocolate either. . .less by Jon Empey on July 17 2009, 08:34 Find this comment inappropriate? Report it

Gold storage space The Gnomes of Zurich are little so their storage spaces are little thus need more of them than normal people because they fill up so fast. by Pat Shuff on July 17 2009, 09:06 Find this comment inappropriate? Report it

Gold is not investing Adam Smith told us clearly what are productive investments and what are not. Gold is not a productive investment-unless you believe that the whole world will turn to the profession of jewelers. These bankers don't understand the basics of economics . .more and investing-that buying a metal like copper, which puts so much human industry in motion, is not the same as buying a useless metal like Gold, which is mostly used for ornamental purposes (industrial use is good-ornamental use is bad. One produces more stuff, the other is just an expense, a consumptive expense). Any banker or serious investor/mutual fund who calls Gold as an investment should be fired. These people are marketeers dressed in nice suits-they don't know anything about what investing truly is. Sanjay John Gandhi www.sanjayjohn.com . .less by Sanjay John Gandhi on July 17 2009, 10:37 Find this comment inappropriate? Report it

ETFs are safe, don't buy physical I think this article was designed to leave an impression that the ETF are back by real gold in a secure place and that there's no need to buy the actual physical gold. 'ETFs are just fine, in fact we're running out of space holding the gold backing . .more the ETS!!' I got here through a link by non other than kitco.com, well known for their strange position on buying physical gold. . .less by J Pier on July 17 2009, 12:39 Find this comment inappropriate? Report it

G.A.T.A. Did Bill Murphy think this one up? by strat on July 17 2009, 12:49 Find this comment inappropriate? Report it

Aaahh! My balls are ichy! Any one got some gold I can rest my nutz on? by J on July 17 2009, 12:58 Find this comment inappropriate? Report it

Swiss gold storage. Any news concerning anything positive will be criticised by the brokerage retailers. Buy gold bullion and have it delivered and you will never lose. by alalbroan@yahoo.com on July 17 2009, 14:36 Find this comment inappropriate? Report it

gold storage look all the gold produced is littele more than the "arc de triomphe in paris " in volume. i can assure you we have space for another 1500 years without problems. by boehi1@yahoo.com on July 17 2009, 14:40 Find this comment inappropriate? Report it

Bubble in the making... How many times do we have to hear about a bubble before we begin to recognize the signs... Makes one think we are about to see movement in one direction or another.... very soon. by goldbug on July 17 2009, 17:46 Find this comment inappropriate? Report it

gold storage I guess if you can create a demand by claiming there is a shortage of space you can charge more to store it. by Ian on July 17 2009, 17:57 Find this comment inappropriate? Report it

investing Something is worth a value if people perceive it to be. If people see value in gold it is valuable... It doens't matter if it is a "usable" material like copper. by John on July 17 2009, 22:19 Find this comment inappropriate? Report it

Gold is money To the poster that said gold is a bad investment, is obviously clueless. Gold is money and money saved is called savings. Savings leads to investments. by Joe on July 18 2009, 00:42 Find this comment inappropriate? Report it

Gold is only Real Money on Earth Gold is the universal currency........ always has been always will be. Paper money will be colored toilet paper once the world realizes the fact that Gold is the only way common citizens can store wealth. Governments cannot inflate a system based . .more on GOLD and rob the citizens through inflation. Governments and Bankers love GOLD for themselves but despise it in the hands of the "common people". That is why banks exchange GOLD between themselves, not paper fiat monopoly money. . .less by Julian on July 18 2009, 01:06 Find this comment inappropriate? Report it

gold storage and its problems! excess of gold in reserves and every where!!!! will it bring the gold prices tumbling down???? just waiting for some huge holder of gold resreves to sell off !!!!!! as it was in late 1990's !!! by kiran on July 18 2009, 02:31 Find this comment inappropriate? Report it

You can store wealth in many ways. Gold is a very compact way. Silver is another excellent way. The only limitation on storing wealth is that the medium needs to be in demand the day you decide to use it. Lets pretend that we discovered that the whole moon was made of . .more gold and we had an easy way to extract it. Over night hoarded gold would lose much of its value. Fiat money are not a wealth storage, but a hidden tax. A negative interest loan from you to the state. You lend away your wealth and have to pay for the privilege. . .less by Chris on July 18 2009, 02:39 Find this comment inappropriate? Report it

Only gold in the hand glitters I wouldn't touch an gold ETF with a barge pole. Take delivery of your money aka gold. by pmurgs on July 18 2009, 03:14 Find this comment inappropriate? Report it

Swiss Gold Storage. note, that retail brokerage order takers are always ready to sell you something which makes them money. They can not prosper by recommending Gold & Silver, not even stocks, this leaves investment funds in strong hands for an extended period of . .more time, no churning means metals are a bad investment as claimed. The three NY banks are ordered by the Fed to sell metals short that they do not own and lossing plenty but keeps the spot price down. This came from a Wamu executive who did what he was told but was doublecrossed by the FDIC when it closed Wamu down in 2008. The EAGLE coin is convoluted idea by the anti gold crowd to make the people think that gold is plentyfull and not money, no need to own it as it cannot be used as a medium of exchange, only fiat paper printed as much as needed has value. Gold is not subject to INFLATION, therefor the only value that cannot by manipulated by government. . .less by Kinn Hepp on July 18 2009, 14:40 Find this comment inappropriate? Report it

storage Oh, I believe the shortage is real because they've filled the entire vault with valuless U.S. treasuries, bank copies of unbacked silver and gold certificates and all the black mail pictures and tapes they store for Goldman sachs! by Canadian silver bug on July 19 2009, 17:29 Find this comment inappropriate? Report it

volume of the world's gold reserves One really must wonder. How dumb do they think people really are? I looked up the World Gold Council stats....the June 2009 world reserves of gold are at 29,692 tonnes. The density of gold is 19.3 g/cm^3. Do the maths....this converts into a . .more volume of a cube with edge 11.54 m (I know it sounds too small, but work it out) - it's 1,538 m^3. So we are to believe that they are running out of space??!! . .less by KJB on July 19 2009, 23:00 Find this comment inappropriate? Report it

Gold is money but not an investment Gold might be money (at least as long as it is accepted as such - this has not always been so everywhere and might not be so in the future) - but money is *not* an investment. Only capital is investment - and money is not always . .more capital. Yes, it is savings. Yes, savings *may* lead to investment. But unless and until they do, money is not capital and it is not an investment. So, until you sell your gold and INVEST the proceedings into something bearing interest or otherwise working to increase its value, you don't have an investment. The PRICE of your gold increasing is NOT "your money working to increase its value", because the VALUE of gold is constant and doesn't increase (or decrease). It's price just reflects the amount of faith people have in the US dollar or whatever other toilet paper is used to measure the price of gold in. So, you can't "invest" in gold. You can only save in gold. . .less by Vess on July 20 2009, 00:14 Find this comment inappropriate? Report it

Gold Of course gold (and silver) are the only real money. Don´t waste your energy arguing with the ignorant and brainwashed who will be soon be impoverished as the fiat system continues its collapse. That you G.A.T.A., Jim Sinclaire at . .more jsmineset, jim willie at the goldenjackass, goldseek and many others for your valuable information and updates. Lets share our favorite sources of information. . .less by LAWRENCE on July 20 2009, 10:57 Find this comment inappropriate? Report it

Correction ¨Thank you ... not that you ... by Gold on July 20 2009, 10:59 Find this comment inappropriate? Report it

Running out of space to store your Gold? I have plenty of space left in my personal vault here in Texas and I will store it for you at no charge. :)P by Goldie Locks on July 20 2009, 17:22 Find this comment inappropriate? Report it

Swiss gold storage problem? Fort Knox is empty so bring it on over? by Midas on July 20 2009, 18:32 Find this comment inappropriate? Report it

Gold Storage Problems. I would imagine that it's not the gold storage problem is not VOLUME limited but WEIGHT limited. Where can you safely store such massively heavy items without the floor giving out? It has to be ground floor or underground and then you . .more would need substantially a reinforced building for safety and security purposes. One cannot simply fill the entire volume of a facility as that much gold in one spot could crack the floor and make it's own basement.... . .less by EffKay on July 21 2009, 08:23 Find this comment inappropriate? Report it

volume vs weight for gold I do not agree with the weight limit. How much do you think a building weighs? That is supported by its foundations, so storing gold should not be an issue. I agree that you shouldn't store it above a swampy ground which will compress, but given . .more Switzerland's geology, it doesn't strike me that they should be short on solid ground. . .less by kjb on July 21 2009, 19:53 Find this comment inappropriate? Report it

Keep your gold Everyone who is hoarding it is waiting for the end of fiat money, which would pretty much mean the end of stable govts, which would pretty much mean the end of public security, which would pretty much mean each man for himself, which would pretty . .more much mean, "why the f%#k would I want some piece of heavy shiny metal to tote around and try to exchange for stuff I want to eat "and why would anyone else value it. Gold is only valuable in a world that has all necessities and wants luxuries. When only 1-2% of people have all the gold (or fiat money for that matter) the rest of us will just say screw it we dont want that stuff anyway. Let the elites trade it amongst themselves, what a customer base that is. . .less by Greg on July 23 2009, 13:41 Find this comment inappropriate? Report it

re: Keep your gold Shhhh. Don't be logical, it will only disturb them and make them angry... by Steve on July 23 2009, 18:13 Find this comment inappropriate? Report it

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