Barclays Capital has heeded the siren call of gold—at least to its customers. It announced Friday that it was planning, together with The Brink’s Co., to build a new precious metals vault to hold the physical assets its customers have purchased in the quest for safe investment havens this year.
Bloomberg reported that the new vault, planned for London, may be open by as early as next summer. Brink’s opened a new facility itself earlier in the year and is considering building another as well. Both will apparently need it; if gold holds true to form, 2011 will be its eleventh straight year of gains, the longest such run since 1920. Some market experts are predicting that gold prices may top $2,000 by the end of the year; it has already topped $1,900, although it has been seesawing for the past few weeks, and has added 24% so far this year. Silver has more than tripled in value since 2008.
Currently investors own, through ETFs, 2,145.2 metric tons of gold; that is more than all but four central banks, which are also expanding their own reserves for the first time in 20 years.
Barclays said the vault was being built “in response to client demand. This is part of our long-term commitment to the bullion market.”
The physical location of the vault will likely be in the traditional area for such facilities, defined by the London Bullion Market Association as the area bounded by the M25 road around London. The new Brink’s vault, an above-ground facility, took nearly two years to build.