Megan Brooks
The Bank of England is one of the largest stores of gold in the world, with over 400,000 gold bars worth billions of pounds stored in nine underground vaults. The majority of these gold bars are held on behalf of other central banks and similar institutions, with only around 6% of the gold in the Bank's vaults held on behalf of the UK Treasury. One of these central banks is the Bank of Portugal, which stores 186.4 tonnes of gold in the Bank of England, constituting 48.7% of its gold reserves.
| Characteristics | Values |
|---|---|
| Amount of gold stored in the Bank of England | 400,000 gold bars |
| Worth of the gold | Over £200 billion |
| Number of vaults | 9 |
| Location of the vaults | Underground |
| Owners of the gold | The UK Government, banks, and other governments around the world |
| Amount of gold owned by the Bank of England | 2 bars |
| Amount of Portuguese gold stored in the Bank of England | 186 tonnes |
| Percentage of Portuguese gold stored in the Bank of England | 48.7% |
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What You'll Learn
The Bank of England stores gold for other countries
The Bank of England is home to one of the largest stores of gold in the world, with over 400,000 gold bars worth billions of pounds. The gold is stored in nine underground vaults, with customers including the UK government, banks, and other governments around the world. The Bank of England also provides gold accounts to certain commercial firms that facilitate access for central banks to the London gold market, which is the global centre for gold trading.
The Bank of England offers gold storage on an allocated basis, meaning that customers retain the title to specific gold bars in the vaults. This provides safe custody for the United Kingdom's gold reserves and for other central banks, supporting financial stability by providing access to the liquidity of the London gold market.
One notable example of a country that stores its gold reserves in the Bank of England is Portugal. According to the Portuguese Central Bank's annual report, 48.7% of Portugal's gold, or about 186 tonnes, is stored in the Bank of England. This makes up the majority of the gold that Portugal stores abroad, with smaller portions stored with the Bank for International Settlements (BIS) and the Banque de France in Paris.
By storing its gold reserves in the Bank of England, Portugal can take advantage of London's position as the global centre for gold trading and benefit from the secure custody provided by one of the world's largest stores of gold.
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The Bank of England's gold vault security
The Bank of England is home to one of the largest stores of gold anywhere in the world, with around 400,000 bars of gold, worth over £100 billion. The gold is kept in nine underground vaults, and the Bank takes the security of these vaults very seriously.
The Bank of England's gold vaults are among the most secure storage facilities on the planet. The Bank provides safe custody of gold, supporting central bank reserve management and international financial stability. The Bank's customers include the UK government, banks, and other governments around the world.
Access to the gold vaults is highly restricted, with only a small team overseeing the reserves. The gold is stored on behalf of customers, and the Bank provides gold storage on an allocated basis, meaning that the customer retains the title to specific gold bars in the vaults. When a customer trades gold, the bar typically remains in the vault, and only the ownership details are changed in the system.
In addition to technological security measures, the Bank of England also has procedures in place to maintain the security of its gold reserves. For example, in the rare case of a security breach, the Bank has a process to identify and rectify the issue. As per a story from the Victorian era, an anonymous letter alerted the Bank's directors to a potential security threat. Upon investigation, it was discovered that a drain ran directly under the gold vault. Thankfully, no gold was missing, and the incident was resolved with the Bank rewarding the honest individual who brought it to their attention.
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The Bank of England's gold bar ownership
The Bank of England is one of the largest stores of gold in the world, with over 400,000 gold bars worth over £200 billion kept in nine underground vaults. The majority of these gold bars are owned by the Bank's customers, which include the UK government, banks, and other governments around the world. These customers can trade gold bars with each other without the physical movement of the bars—only the owner's name changes in the Bank's system.
The Bank of England itself only owns two gold bars, which are displayed in its museum and are available for visitors to lift. The Bank acts as a custodian for its customers' gold, providing safe storage and supporting international financial stability. London is the global centre for gold trading, and the Bank's location allows it to facilitate central banks' access to the London gold market.
The Bank of England's role as a custodian is particularly attractive to countries looking for a safe place to store their gold reserves. Historically, the United Kingdom has been perceived as a stable location for gold storage, and during the 20th century, gold bullion from around the world was kept in the Bank of England.
One notable example of a country that stores a significant portion of its gold reserves in the Bank of England is Portugal. The Banco de Portugal maintains approximately 186 tonnes (48.7%) of its gold reserves in the Bank of England, with smaller portions stored in other locations such as the Bank for International Settlements (BIS) and the Banque de France in Paris. This makes the Bank of England one of the main locations for Portuguese gold custody and transactions.
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The Bank of England's role in the London gold market
The Bank of England is one of the largest gold custodians in the world, storing more than 400,000 gold bars worth billions of pounds in nine underground vaults. Its customers include the UK government, banks, and other governments around the world.
The Bank of England provides safe custody for the United Kingdom's gold reserves, which are owned by Her Majesty's Treasury, and for other central banks and certain commercial firms. By providing safe gold custody, the Bank supports central bank reserve management and international financial stability.
London is the global centre for gold trading. The Bank of England supports financial stability by providing central banks with access to the liquidity of the London gold market. It does this by providing gold accounts to certain commercial firms that facilitate access for central banks to the London gold market.
The Bank of England has played a significant role in the London gold market since the first gold rush in 1697, which brought metal from Brazil into London. The Bank set up a 'bullion warehouse' to serve the entire European market, and it continued to be a key player in the industry during subsequent gold rushes in California, Australia, and South Africa. The Bank was also responsible for buying gold and sending it to the Mint for coinage when Britain was on the gold standard.
In addition to storing gold, the Bank of England also provides gold accounts to certain commercial firms. In deciding whether to provide an account, the Bank considers factors such as the firm's day-to-day activities and its involvement in active or prospective trading with a central bank customer.
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The Bank of England's gold reserves
The Bank of England is the second-largest keeper of gold in the world, with only the New York Federal Reserve holding more. The bank stores over 400,000 gold bars worth over £100 billion in nine underground vaults. The Bank of England provides safe custody for the United Kingdom's gold reserves and for other central banks and certain commercial firms.
The Bank of England's gold vaults are located below the bank itself. The gold is guarded carefully, and not many people are allowed to visit the vaults. However, Queen Elizabeth II and the then Prince Charles have had a look around. The bank's customers include the UK government, banks, and other governments worldwide. Each gold bar is worth hundreds of thousands of pounds, and their value can fluctuate. Customers can trade gold bars with other customers at the bank, with the ownership simply changing on the bank's system rather than the physical gold being moved.
The Bank of England offers gold accounts to central bank customers, providing them with secure custody for their gold reserves and access to the liquidity of the London gold market. London is the global centre for gold trading. The bank also provides gold accounts to certain commercial firms, guided by specific criteria. These firms must support the liquidity of the London gold market, and the bank may consider factors such as evidence of active or prospective trading with a central bank customer.
The Bank of England holds a significant portion of Portugal's gold reserves. While 45% of Portugal's gold is stored in the country, mainly in a vault near Lisbon, the remaining 55% is kept abroad, with most of it stored in the Bank of England in London.
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Frequently asked questions
Yes, the Bank of England stores approximately 48.7% of Portugal's gold, which amounts to 186.4 tonnes.
The Bank of England holds over 400,000 gold bars, worth over £200 billion.
The Bank of England stores gold for the UK government, other governments, and banks. It also has a small foreign exchange reserve. However, the UK's gold reserves are owned by HM Treasury, and the Bank manages this reserve on its behalf.
The Bank of England does not allow many people to visit its vaults. However, you can visit the Bank of England Museum and see the two gold bars that the bank owns.
