Gold has maintained its value for millennia, and as with anything of value, those that hold it have sought to store it safely, and securely.
Safes were used by the Ancient Egyptians, Romans used complex lock mechanisms, and Mali’s medieval ruler Mansa Musa supposedly carried much of his estimated $400 billion worth of gold with him, in a vast entourage of people and camels.
Despite the digitisation of financial markets and investing, the storage of gold that investors have exposure to is still a key question. How that gold is stored depends on the type of investor, or owner, of said gold.
For governments, the Federal Reserve Bank in New York is often a favoured location. Over 95% of the bullion is stored for foreign owners. Other central banks can also offer this, and it is estimated that they hold around a fifth of all the gold mined throughout history. These banks also account for the majority of purchasing, with 410 tonnes of gold flowing to central banks in the first half of 2025.
Most investors, however, are not able to store their gold at a central bank. How an investor’s gold is stored depends on how they have decided to gain exposure. Purchase of physical bullion for self-storage at home is an option, but this carries risks (including the likely disapproval of your home insurance provider). Alternatively, there are third party companies that offer storage arrangements – but this can be costly, and make holistic portfolio management an issue.
Instead, many investors opt for exchange-traded commodities (ETCs) for their gold exposure, purchasing shares in an ETC on an exchange such as London Stock Exchange. This gives them shares in a dedicated company structure that owns gold, providing them with daily, liquid exposure to the price of gold. But this leads to further storage questions – where is that gold kept, and how safely is it stored.
Custody for Gold ETCs can be opaque. Typically, the gold backing a gold ETC (and therefore the source of its shares’ value) is held at the vault of a commercial bank. London has around 8,865 tonnes of gold in numerous vaults around the city, but we only know the location of one of them – the Bank of England. The other vaults, owned by commercial banks such as J.P. Morgan and HSBC, are hidden. Times have changed from individuals holding gold in personal safes – now we trust banks to hold it in locations unbeknownst to the owners.
For the more risk-minded investor, this arrangement may seem counterintuitive. One of the attractions of gold exposure in a portfolio is its potential to hedge against systemic financial risk. Owning a gold ETC that is purely backed by gold stored within the financial sector perhaps diminishes this hedge.
At the same time, most of the gold available to UK investors is held in a small geographical area of London. Quite literally, “all of the eggs are in one basket”, which may not work for investors concerned about custody diversification.
However – there are alternatives. One example is The Royal Mint’s purpose-built vault outside of the London banking system, at a purpose-built, highly secure site in Wales. Read more on The Vault®.
The Royal Mint Responsibly Sourced Physical Gold ETC (RMAU) tracks the spot price of physical gold and offers investors access to the gold market. Uniquely, retail investors can redeem for physical bars and coins stored at The Royal Mint’s secure vault in Llantrisant. 100% of the gold custodied is backed by London Bullion Market Association (LBMA) post-2019 Good Delivery bars, of which approximately half of the gold is 100% recycled.
To explore The Royal Mint Responsibly Sourced Physical Gold ETC (RMAU) in more detail, click here. Investors can also access GBP, EUR and CHF hedged ETCs.
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