Monday, October 4, 2010

The Power Has Shifted: Individuals Now Own More Gold Than Central Banks

FT reports:
JPMorgan has reopened an underground gold vault in New York that was mothballed in the 1990s, in the latest sign of the soaring appetite for bullion...

Many commercial banks dismantled their vaults in the 1980s and 1990s. But now they are rushing to build: JPMorgan recently built a vault in Singapore, while Deutsche Bank and Barclays Capital are considering opening new vaults in London.

The demand for storage comes as investors are buying physical gold rather than investing in precious metals futures or mining equities. Private investors hold about 30,000 tonnes of gold, according to the consultancy GFMS – more than a sixth of the world’s gold and, for the first time in modern history, more than central banks...Many historic vaults cannot be reopened as they have been converted into restaurants: one New York vault built in 1902 for John Pierpont Morgan is now home to a steakhouse.

7 comments:

  1. The Indian people (from the Republic of India) have long known the use and importance of gold. Today, they constitute one of the largest (if not THE largest) holders/consumers of gold and silver.

    I wouldn't be surprised, were such an analysis undertaken; if the vast Indian public held more gold and/or precious metals combined, than ANY government worldwide...

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  2. If private investors and central banks together own about 1/3 (1/6 + 1/6) of the world's gold, then where is the other 2/3?

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  3. The federal government confiscated gold in the 1930s. It's an extraordinarily bad idea to put your gold in a public facility.

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  4. Governments are the missing piece of the puzzle. Worldwide, governments hold (an average) 10% of their assets in gold. China only has about 3%, but they are looking to increase their holdings. Central banks are not considered government (at least, not yet, but they're working on it).

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  5. It's hard to imagine that the price of gold will go any higher than it is now, but I suppose that the facts speak for themselves...

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  6. http://en.wikipedia.org/wiki/Gold_reserves#World_gold_holdings

    The figures in this table are from 2008. About half of the world's gold is held as jewelry (hello, India), so it appears that individuals own much more gold than states (including central banks).

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  7. What are these guys thinking? Gold won;t protect you because gain is subject to collectable tax rates (soon to be 39% fed + state). Inflation, gold triples in value, you end up with, after tax, 2/3 of your invested value. Better than ending up with 1/3, but really 1/3 confiscation of your savings is not so great. If gold more than triples, the USG can make it illegal to own and buy it at $23 oz. They's do a big PR thng on speculators gtting unjustified wealth while everyone else is literally hungery. The USG could pay for so many needed medical procedures with the wealth of those evil gold speculators.

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