Tag Archives: vault

G4S London Gold Vault 2.0 – ICBC Standard Bank in, Deutsche Bank out

On 8 January 2016, Reuters broke the news that ICBC Standard Bank has purchased the lease on Deutsche Bank’s gold vault in London, and that ICBC Standard intends to become a member of the clearing syndicate, London Precious Metals Clearing Limited (LPMCL):

“ICBC Standard Bank is buying the lease on Deutsche Bank’s London gold and silver vault, enlarging its footprint in the city’s bullion market..”

ICBC.. has also applied to become a clearing member of the London gold and silver over-the-counter business.

The vault became operational in June 2014 and has a capacity of 1,500 tonnes. It was built and is managed by British security services company G4S.

These moves by ICBC Standard Bank have now put both the G4S vault and LPMCL, (a private company), back in the spotlight.

The Background to the G4S Vault

On 20 March 2012, Deutsche Bank issued a press release announcing that it had contracted security company G4S to construct and manage a precious metals vault on Deutsche’s behalf in London. Critically, this was a substantial long-term partnership between Deutsche Bank and G4S, with G4S doing the actual work of building and then operating the precious metals vault. Deutsche stated at the time in March 2012 that the new vault would be for the exclusive use of Deutsche Bank clients, and that it would available for use by these clients during 2013:

“Deutsche Bank and G4S are pleased to announce that they are to join forces in establishing a new vault for the storage of precious metals in the UK.”

The new vault will be built and managed by G4S, the world’s leading international security solutions group, for the exclusive use of Deutsche Bank and its clients and will be an enhancement to Deutsche Bank’s already extensive metal trading and clearing capabilities. 

“‘It will position us well to quickly become a leading metals clearing and custody house,’ commented Raymond Key, Global Head of Metals Trading at Deutsche Bank. The vault, which will be constructed and run to industry-leading standards of security, will be available for clients in 2013.

Likewise, on 20 March 2012, G4S released its own press release in which it revealed that the contract with Deutsche Bank was a 10 year commercial deal and that discussions about building the vault had commenced in 2009:

“Working in partnership with Deutsche Bank, the business has secured a ten year commercial arrangement to establish a state of the art precious metals vault that will be built and managed by G4S, and will enable Deutsche Bank to extend and enhance their metal trading and clearing capabilities.

Discussions started with Deutsche Bank back in 2009 when increased economic volatility started to cause a rise in interest levels among investors for precious metals.”

“James Dinsdale, Managing Director, G4S Cash Solutions, said: ‘We’re delighted to have secured this partnership with Deutsche Bank….. This agreement represents a strategic move in the UK market place for G4S.”

Law firm Clyde & Co acted as advisor to G4S for the Deutsche vault project, and it too issued its own press release on 19 March 2012:

“Clyde & Co has advised global security and logistics company G4S in relation to a project for Deutsche Bank.

G4S will build and manage a gold bullion secure storage vault in the UK for Deutsche Bank.”

What none of the press releases mentioned was that the precious metal vault was being integrated into the basement of a new G4S operating centre in Park Royal, London.


As it turns out, Deutsche did not deliver on its self-publicised deadline for the new vault becoming available to its clients in 2013. However, on 9 June 2014, over 2 years after announcing the London vault project, a much reduced Deutsche Bank London precious metals business that had substantially stepped back from the London Gold Market, confirmed to Reuters that it had finally opened its new London precious metals vault. Note that Reuters is usually the first distribution channel that the London Gold Market PR machine contacts to get its stories out on to the newswires.

According to Reuters’ coverage of the June 2014 Deutsche opening announcement:

“Deutsche’s new vault has been built in partnership with logistics company G4S and is open to institutional investors, and commercial and central banks.”

The vault has a capacity of 1,500 tonnes, making it significantly bigger than a 200-tonne storage facility that the bank owns at the Singapore Freeport.

The period from late 2013 to early 2014 turned out to be a turbulent period for Deutsche Bank’s precious metals operations in London, during which time:

- German financial regulator BaFin began an investigation into the London Gold and Silver Fixings, of which Deutsche Bank was a fixing member (November 2013)

- Deutsche Bank announced that it would withdraw its participation in the London Gold and Silver Fixings and sell the Fixing seats (January 2014)

- Deutsche Bank ceased contributing to the GOFO benchmark and ceased being a LBMA market maker for precious metals forwards (February 2014)

- Deutsche Bank ‘failed to sell’ its gold and silver fixing seats (despite ICBC Standard Bank being interested), and Deutsche then merely resorted to withdrawing from the fixings (April/May 2014)

- Deutsche Bank’s Matthew Keen, who was a director of London Gold Market Fixing Limited (LGMFL), London Silver Market Fixing Limited (LSMFL), and  London Precious Metals Clearing Limited (LPMCL) resigned from Deutsche Bank, prompting the appointment of other Deutsche representatives to those company directorships (January 2014)

- Deutsche Bank’s representative on the London Bullion Market Association’s (LBMA) management committee, Ronan Donohoe, resigned from the LBMA management committee on 5 March 2014, only 7 months into a 2 year appointment (March 2014)

Given all the above retrenchments affecting its precious metals activities in London, it is slightly odd that Deutsche Bank still went ahead in June 2014 and announced the opening, at least in name, of its London precious metals vault collaboration with G4S. Perhaps it had a contractual obligation with G4S to do so.

But odder still is that less that 5 months after announcing the opening of the new vault, Deutsche Bank then stepped back even further by closing its physical precious metals trading operation in London in November 2014, and then announced in December 2014 that it would actually be interested in selling its London gold vault. This decision is beyond bizarre given the huge level of commitment that Deutsche Bank had made to the development of the vault for at least 4-5 years beginning in 2009.

As Reuters reported on 24 December 2014:

“Deutsche Bank is open to offers for its London-based gold vault following the closure of its physical precious metals business, three sources familiar with the matter said on Wednesday. ‘If the right offer came along, then the bank would sell the London vault,’ one source close to the situation said.

The German bank shut its physical precious metals trading arm last month as it further reduced its exposure to commodity markets.”

Deutsche declined to comment on the status of its vaulting operation.

 “…it could be difficult for Deutsche Bank to find buyers among its nearest peers. But sources familiar with the matter said a Chinese entity could come forward. ICBC is trying to build a presence in London and the sources said it was a likely candidate. ICBC declined to comment.”

The key question is did this Deutsche Bank vault in London, operated by G4S, ever do any precious metals business in the time between June 2014 and November 2014? If it did, then this activity could not have been substantial.

Deutsche Bank clients holding allocated gold and other precious metals with Deutsche in London would not have been impressed if they were told their holdings were being moved to the new vault in the summer of 2014, only to find out a few months later that Deutsche was looking to exit its involvement with the vault.

While the G4S / Deutsche vault sales process seemed to remain on hold for the entire year of 2015 with no announced activity from either Deutsche bank or ICBC, and no media scrutiny, Deutsche continued to exit the physical gold business in London amid a number of other significant developments. In August 2015, Deutsche departed from the London Precious Metals Clearing Limited (LPMCL) company, leaving HSBC, JP Morgan, Bank of Nova Scotia, Barclays, and UBS as the remaining 5 members of the London gold and silver clearing consortium.

On 20 August 2015, Reuters reported that:

“Deutsche Bank is to sever its last link with commodity trading by resigning as a clearing member of the London gold and silver over-the-counter business..” [LPMCL]

It’s a little known fact that London Precious Metals Clearing Limited (LPMCL) (company number 04195299) is a UK private limited company with the same registered address as the London Gold Market Fixing Limited and the London Silver Market Fixing Company Limited. This registered address is C/O Hackwood Secretaries Limited, One Silk Street, London EC2Y 8HQ.  Indeed, Hackwood Secretaries Limited is the Company Secretary for LPMCL. Hackwood Secretaries Limited is one of the companies Linklaters uses to offer its company sectretariat services. And Linklaters is one of the better known ‘magic circle’ global law firms that is headquartered in London.

While LPMCL has so far managed to steer clear of US class actions suits concerning precious metals manipulation accusations, its fellow Linklater registered gold and silver fixing companies, London Gold Market Fixing Limited and the London Silver Market Fixing Company Limited, both of which have had a lot of the same directors as LPMCL, have not been so lucky on the class action front, and both companies are now facing live consolidated class action suits in New York courts.

Each member bank of LPMCL usually appoints two directors who are senior staff members of that investment bank. So with 6 investment banks within LPMCL, there are usually 11-12 LPMCL directors, give or take a few people who would invariably be moving bank at any given time.

Deutsche Bank’s two last-serving directors of LPMCL, Raj Kumar and David Mitchell-Innes, actually resigned from LPMCL on 9th February and 1st September 2015, respectively. The February 2015 LPMCL resignation by Kumar seems to have been precipitated by his internal move within Deutsche Bank for a short while to the role of Global COO for Commodities, but then significantly, Kumar left Deutsche Bank in July 2015 to take up a role in ICBC Standard Bank in September 2015 as a managing director in ICBC Standard’s  precious metals business, as Reuters reported on 17 September:

“London-based ICBC Standard Bank Plc named Raj Kumar head of its precious metals business development, effective immediately.

Kumar, who will be based in London, joins from Deutsche Bank AG, where he was managing director of precious metals business.”

 This Deutsche Bank – ICBC Standard Bank – LPMCL link in the form of Raj Kumar was undoubtedly useful to ICBC Standard in its move to take on Park Royal vault lease from Deutsche Bank, and could help facilitate ICBC Standard’s stance in an application to become a member of LPMCL.

However, the 20 August Reuters report also interestingly stated that Standard Chartered might be interested in becoming a LPMCL member:

“…there is one other bank, Standard Chartered, that could become a gold and silver clearing member in the next few months.”

Could this be a typo by Reuters when it meant to say Standard Bank? Possibly, but most likely not. Standard Chartered is an important bank in the London Gold Market in its role as a LBMA market maker in spot and options for gold and silver which it secured in February 2015. But Standard Bank is not to be confused with Standard Chartered bank. They are two entirely separate banking institutions, albeit with historical connections.

Standard Chartered is headquartered in London, and is well-known for its emerging markets focus, particularly in Asia and Africa. The ‘Standard’ in Standard Chartered in some ways does refer to the South African ‘Standard Bank’, since Standard Chartered was created in 1969 through the merger of Standard Bank of British South Africa and Chartered Bank of India, Australia and China. However in 1987, Standard Chartered sold its shareholding in Standard Bank.

In another LPMCL related link that could involve Standard Chartered, Martyn Whitehead, former director of LPMCL for Barclays, left Barclays in May 2015, and joined Standard Chartered in August 2015, as MD and head of Commodity Sales.

In April 2015, Reuters said of Whitehead’s pending departure from Barclays:

“Barclays’ global head of metals and mining sales Martyn Whitehead will leave the bank as part of its restructuring and exit from some parts of its commodities business, a source familiar with the situation told Reuters on Monday.

Whitehead was Barclays’ only representative listed with London Precious Metals Clearing Ltd. Barclays is one of the six banks that organise and co-ordinate bullion clearing and vaulting in London.”

Therefore, could two former directors of LPMCL, namely Raj Kumar and Martyn Whitehead, now be spearheading applications on the part of their respective new employers, ICBC Standard Bank and Standard Chartered, to both join the private club that is London Precious Metals Clearing Limited, and have access to the exorbitant privilege of being part of the London Gold Market’s private gold clearing consortium, and preferential treatment form the Bank of England gold and foreign exchange desk?

Standard ICBC


China’s largest bank, Industrial and Commercial Bank of China (ICBC), has been eager to become a premier player in the London Gold Market for some time now. Although it became an Ordinary Member of the LBMA in 2012, ICBC had stated in 2012 its desire to become a LBMA Market Making Member. ICBC was also interested in buying Deutsche Bank’s seat in the old Gold Fixing in 2014, but strangely this sale never happened. See my BullionStar blog “Chinese Banks as direct participants in the new LBMA Gold and Silver Price auctions? Not so fast!” from March 2015 under section “ICBC and Standard Bank” for more details on this.

One key development for ICBC was crystalised in February 2015,  when ICBC finalised its acquisition of 60% of Standard Bank Plc (the UK arm of Standard Bank) from Standard Bank of South Africa, to create the entity now known as ICBC Standard Bank. See also the press release ICBC completes acquisition of 60% of Standard Bank Plc 20150129. The LBMA website nows list ICBC Standard Bank as an Ordinary Member of the LBMA in lieu of listings for both ICBC and Standard Bank.

ICBC also stated in June 2015 that it wanted to become a direct participant in the LBMA Gold Price auction, but again strangely this has not yet happened despite 2 other Chinese banks, namely Bank of China and China Construction Bank (CCB), eventually being authorised by the LBMA to join up to the LBMA Gold Price auction on 22 June 2015 and 30 October 2015, respectively.

Prior to the controlling interest purchase by ICBC, Standard Bank was no stranger to London Gold Market gold vaulting, and a 2009 report from Abu Dahbi’s “The National” on United Arab Emirates related bullion stated that gold had:

“moved to the vaults of Standard Bank of South Africa, located in the London offices of JPMorgan Chase at 60 Victoria Embankment, Blackfriars, London.”

The ‘vaults of Standard Bank‘ reference just refers to allocated or sub-leased space in the JP Morgan vault in London in the name of Standard Bank of South Africa.

Finally, ICBC also has a strategic interest in the London platinum group metals market through Standard Bank Plc’s existing participation in the London Platinum and Palladium Market especially through the daily platinum and palladium fix auctions, which are now administered by the LME on behalf of the LBMA.


The Park Royal VAULT

As first revealed by Zerohedge in December 2014, the London precious metal vault that was built by G4S on behalf of Deutsche Bank is located at in the Park Royal area of London at 291 Abbey Road, London NW10 7SA.

This Park Royal location was actually telegraphed by G4S itself as early as July 2013 when ‘G4S Cash Solutions’ advertised for “Precious Metals Vault Officers” for the new vault in a job advert on the careers section of its own website, which listed the job location as ‘Park Royal, West London‘. Not really a very security conscious approach for whats purports to be one of the world’s foremost security companies. The job adverts included the following:

Precious Metals Vault Officers

Location: Park Royal, West London

Number of Positions: 16

Closing Date: November 2, 2013

G4S Cash Solutions, in partnership with one of the world’s leading financial institutions, is launching a Precious Metal Vault in West London.  The vault which has been created with innovative, state of the art design and technology is at the leading edge of the global bullion storage industry.

We are now recruiting an exceptional team of Precious Metal Vault Officers who will operate and secure our vault in this exciting, new venture.”

  • “responsible for processing all inbound, outbound and stock management transactions and movements of Precious Metals”
  • “The operation and use of a Vault Management System together with specialist Precious Metals equipment”
  • “The conduct of receipting, weighing and stowing of Precious Metals including their physical movement in and around the Vault “

Other roles at the new vault were also advertised on the G4S website, such as  “Vault Manager – Precious Metals” which included information such as:

Vault Manager – Precious Metals

Location: Park Royal

Number of Positions: 1

Closing Date: November 2, 2013               

G4S is the largest secure solutions company in the world…Our Cash Management Solutions business has expertise in cash and valuables transportation, cash processing, ATM and cash centre outsourcing, secure storage and retrieval.”

“Responsible for the management, security and operations of the precious metals vault including security and traceability of all assets entering and leaving the vault.”

  • “To work closely with internal management on the strategic global growth of our bullion projects; offering product, operational knowledge and LBMA expertise.”
  • “To train vault officers to ensure they are working within the LBMA / LPPM /  LPMCL guidelines…”  
  • A strong working knowledge of LBMA, LPPM and LPMCL codes of practice and proven experience of implementation of these codes
  •  ** Proven experience of working within a Precious Metal vault **
  • Proven experience of working within LBMA, LPPM and LPMCL codes of practice  (including weighing of bullion)”


…and a Weighmaster job role which included:


Location: Park Royal

Number of Positions: 1

Closing Date: December 31, 2015


  • Planning and implementing the conduct of receipting, weighing and stowing of precious metals including their physical movement in and around the vault
  • Planning for and implementing the conduct of picking, packing and shipping of precious metals including their physical movement in and around the vault


There were also similar job adverts on the G4S website for other positions at Park Royal including  “Precious Metals Shift Manager” (Positions: 4, closing date 31 October 2013), and “Secure Driver” (Positions:15, closing date 23 June 2014, “Deliver cash and valuables to various customers in a physically active role“).

Note that the closing date for the Secure Driver applicants was a few weeks after Deutsche Bank had announced on 6 June 2014 that it had opened the gold vault. So if the drivers hadn’t even been hired in June 2014 and probably not in July 2014 either, then there was nothing being moved in or out of the vault at that time, and there was most likely never any Deutsche Bank precious metals moved in or out of the G4S vault, which would also explain why, in December 2014, “Deutsche declined to comment on the status of its vaulting operation”, and would therefore make the vault an extremely bad and money losing investment decision for Deutsche Bank, as well as a bizarre business decision to commit substantially investment to the vault and then walk away from it 2 years later. 

From July to August 2013, G4S even tweeted about these Park Royal roles on its Twitter account and stated the locations of the jobs roles and locations, for example, for “Vault Manager – Precious Metals in Park Royal“.

Not only that, but G4S even advertised these precious metals vault positions to the world on Facebook, complete with the specification of the Park Royal location.

Park Royal

Where is Park Royal? Most people in London, if they know Park Royal at all, would recognise the name as a tube station (train station) and as an area of North West London. Park Royal is just off the North Circular Road, in an industrial area, frequently congested with traffic, just down the road from Hanger Lane roundabout, another often traffic gridlocked area. But as the crow flies, Park Royal is not too far from Heathrow Airport, or the M25 ring-road, or Central London.

As well as telegraphing the general Park Royal area where the new vault was to be built, G4S also went further and specified the exact address of the new operating centre in a planning application document available on the web, conveniently pinpointing the vault building location in this large industrial sprawl, chock full of industrial parks and warehouses:


Page 13 of document: Reference Number OK0229598 SI


Director(s): KEVIN O’CONNOR, Margaret Ann Ryan, Declan Hunt.


New operating centre: PARK ROYAL, 291 ABBEY ROAD LONDON NW10 7SA

New authorisation at this operating centre will be: 45 vehicle(s), 0 trailer(s)

In this case, the planning reference was referencing an increase in the number of vehicles allowed on the site. However, the more interesting planning applications are to be found not in the Office of the Traffic Commissioner, but in the website of Brent Council. These plans give a good overview of some of the details of the basement and vault that ICBC Standard Bank has just taken on the long-term lease for.

Park Royal tube

Planning applications for 291 Abbey Road NW10 7SA

The Park Royal area, including 291 Abbey Road NW10 7SA, is under the remit of Brent Council Borough of London. Brent Council planning applications are available on the Brent Council Planning web site. On the Brent Council web site, there are 5 planning application ‘Case Numbers’ for 219 Abbey Road NW10 7SA submitted since 2012. The sequential nature of there being 5 case numbers just means that after the initial application was made, various details of the application were amended, which necessitated the applicant making subsequent submissions to the Council requesting the changes. This allows the amended plans of the G4S development to be compared to the initial plans. Each of the 5 applications have multiple scanned documents uploaded and attached to the applications.

Case Number 12/2112:  This is the original planning application

Erection of new 2-storey storage facility (Use Class B8)”. Use Class B8 means Distribution or Storage. B8 building use is for storage or as a distribution centre. This application was submitted on 9 August 2012, and the application was granted on 9 November 2012.

Applicant: S Williams, G4S, Sutton House, 15 Carshalton Road, Sutton, Surrey, SM1 4LD

Architects: Pick Everard, Leicester

Pick Everard architectural practice describes itself on its website as “a leading independent, multi-professional consultancy practice working within the property, infrastructure and construction industry.

There are a number documents in the Case Number 12/2112 planning application, the most interesting of which is the initial floor plan diagram of the construction project: Project Park Royal – Document 120437 A 105 B Typical floor plans and sections.

Notice that on the diagram, there is a square-shaped basement specified on the floor plans, listed as ‘Basement Storage’, and this basement is specified as 1178 square metres. This 1178 sq mt space is approximately 34 metres * 34 metres. Furthermore, the ground floor level is listed as “Industrial Warehouse”, 1132 sq metres, with “Vehicle Loading Bays” at the rear, and the 2nd Floor level is listed as “Offices”.

On 20 September 2012,  the London Bullion Market Association (LBMA) published the following guidelines on the location of new precious metals vaults in London: Best Practice Guidelines Used by ‘Loco London’ Vaults – Opening a new vault for the storage of precious metals, in which it stated:

If you wish to store the higher value precious metals then you may find that insurers insist that your vaults are subterranean.

It appears that these guidelines were specifically written for Deutsche Bank and G4S to follow since they were the only parties submitting a planning application for a new precious metals vault in London at that time, and the dates fit exactly. Case Number 12/2112 also includes an initial site location plan Project Park Royal – Document 120437 A 001 J Site Location Plan showing an overview of the site, with car park at front, building in the middle with truck loading bays at the back of the buildings, and truck parking at the rear of the site.

Case number 12/3371: Some small extra details

Case 12/3371 is just an application containing extra details about construction materials etc and security gates, barriers etc. This application was submitted on 18 December 2012, and granted on 12 February 2013.

Case Number 12/3344: Some small extra details

Case 12/3344 just covers some extra details such as car park spaces at the front of the site, for 32 cars, 30 staff/visitor spaces, and 2 disabled spaces. That application was submitted on December 2012, and granted on 13 February 2013.

Case Number 13/0722: Some important revisions to the Project, including a reduction in the size of the Basement

Case Number 13/0722 is interesting in that it included a reduction in the size of the basement from 1178 sq metres in the original application, to 750 sq metres. This application was submitted on 25 March 2013, and granted on 22 April 2013.

The accompanying Delegated Report specified a “Non-material amendment application to: (a) reduce basement area, and other changes such as (e) alterations to fencing, (f) reduction in number of vehicle loading bay shutters from 6 to 5.

“It is proposed to reduce the size of the basement from 1178sqm (as approved) to 750sqm. This is below ground level and will not have a material impact.”

Applicant: Stacy Williams, G4S, Sutton House, 15 Carshalton Road, Sutton, Surrey, SM1 4LD

In the revised floor plan Project Park Royal – Document 120437 A 105 C Typical floor plans and sections, the basement, still listed as ‘Basement Storage’, has been remodelled as a rectangular space and reduced in size to 750 square metres from 1178 sq metres, i.e. a reduction of 428 square metres compared to the original submission. This new 750 sq metre size, as a rectangular area, is roughly 19 metres * 38 metres. See revised floor plans.  While a smaller basement does not necessarily mean a smaller vault, the basement size was more than likely reduced specifically because the vault size had been reduced.

If this was the case, then its possible that Deutsche Bank communicated to G4S that the vault size was to be reduced due to gold bullion exiting London for Asia (via Switzerland) in 2012 and especially during early 2013, and a fear that the previous planned size for the vault would be too big for the intended London bullion activity requirements.

The floor plan diagram specifying the reduced basement was actually created on 26 April 2013, which is coincidentally the week following the historic two-day gold price smash that occurred over Friday 13th and Monday 16th April 2013.  Said another way, the amended planning application which specified the basement size reduction was submitted 2 weeks before the historic gold price smash of 13-16 April 2013, and the application amendment to the floor plans was granted the week after the historic gold price smash of 13-16 April 2013.

When the Deutsche/G4S vault opened in June 2014, Reuters reported that the vault’s capacity was 1,500 tonnes of gold. It’s not clear if this capacity statistic was the capacity from a larger vault that would have been in the larger basement area, i.e. 1178 sq mtrs, which a source may have supplied to Reuters at an earlier time, or whether it referred to a smaller vault within the smaller and revised 750 sq mtr basement area. For if the vault can now hold 1,500 tonnes of gold within a smaller basement, the original basement, being 57% larger, may have been designed to hold in excess of 2,300 tonnes of gold.

It’s either a fortunate or unfortunate set of timings that Deutsche/G4S applied to reduce the size of one of the largest ever precious metals vaults in London within a few weeks of the gold price being critically injured by huge gold futures contract short trading over the 13-16 April 2013 period. It would be interesting to know who made the decision to reduce the area of the basement, and on what rationale this decision was based.

Again, as to how much precious metal, if any, Deutsche Bank ever processed or held in the Park Royal vault is debatable, since a) the vault was not operational until June 2014 and b) Deutsche Bank  was rapidly exiting the London Gold Market at that time. It therefore makes this LinkedIn profile of the person who actually performed the job of Precious Metals Manager at the vault all the more interesting,  a role which is stated to have lasted from December 2013 to May 2015, but a profile in which the references to physically related precious metal activities just refer to the job spec bullet points, and the achievements listed predominantly concern the vault and not the contents of the vault.

G4S spec

Likewise, the ‘Bullion Operations Manager‘ at the G4S vault, a vault which was exclusively for Deutsche’s clients, must have seen fallow periods in which no metal passed over the vault’s threshold with the LinkedIn profile predominantly listing job spec bullet points. However, interestingly, the profile refers to ‘Leasing with [a] major financial corporation to ensure compliance to contractual agreements‘, so there were, as would be the case, contractual agreements between Deutsche and G4S. On the Deutsche side, these contractual agreements  would raise the question of what penalties, if any, Deutsche Bank incurred in exiting contractual obligations with G4S, and whether Deutsche would have received a get-out exemption by delivering ICBC Standard Bank as the willing recipient of the vault lease.

G4S bullion


 Galliford Try

The planning applications submitted to Brent Council also include a “Method Statement & Logistics Plan” report written by the construction contractor Galliford Try for the project. On its website, Gallilford Try describes its Construction division as “a leading construction company, carrying out building and infrastructure works across the UK.

Galliford Try’s Method Statement & Logistics Plan report, which is useful as a comparison benchmark to the actual construction that was completed, reckoned that the construction would take 50 weeks to complete, which probably explains why the vault and building was only complete in mid-2014, given that the amended planning application was only granted by Brent Council on 22 April 2013. It still however does not help in explaining why Deutsche Bank initially thought in 2012 that the vault would be ready for its clients to use in 2013.

Crucially, page 4 of the Galliford Try report, in a section titled “Internal Finishes (weeks 27-50)“, sub-section “Basement (weeks 26 -40)“, confirms that “Once the ceiling grid works have been completed the steel / vault doors will be installed“, which proves beyond doubt that the vault is located in the basement of the G4S operating centre. There are also kitchen and toilet areas in the basement as per other London subterranean precious metals vaults.

On page 3, when discussing the basement excavation and basement concrete slab floor, it also states that  “Pockets will be formed in the floor for the fitting of the security doors etc“, and that “the lift pits…will be installed.”


From page 2:


From page 3:


From page 4:


The Park Royal site on which G4S built the operating centre and vault was first put on the market in November 2011 by Clay Street Property Consultants. The site occupies 1.89 acres and was sold (presumably to a G4S related company) in April 2012 for £4.5 million:

  • 291 Abbey Road & 2-4 Penny Road, Park Royal , London
  • Marketed in November 2011 the 1.89 acre site attracted a broad range of interest including institutional investors, property companies, developers and owner occupiers.
  • Securing 15 bids all at in excess of the asking price the site was sold in April 2012 to an owner occupier for £4,500,000 reflecting a price of £2.38m per acre.

A Google Earth image from July 2013  shows the site with the new development in full flight, and the construction of the basement in progress, and so allows a determination of whether the construction was following the last set of plans approved by Brent Council:

July 2013
Google Earth July 2013


Zooming in on the construction of the basement area from July 2013, the image shows the rectangular darker area where the vault was being positioned, and the lift-pits to the right of the image, one lift shaft at the front, and two towards the rear, which would be adjacent to the truck loading bays. This shape is very much in keeping with the basement size reduction to 750 square metres in the ultimate set of plans approved by Brent Council.

Basement Excavation - July 2013
Basement Excavation – July 2013


Finally, a Google Earth image from June 2015 shows an aerial view of the completed G4S development.

June 2015
Google Earth June 2015



The hasty exit of Deutsche Bank from the London Gold Market has never been adequately explained by the media. It remains an elephant in the room that the mainstream media does not seem to want to touch. The composition and operating mechanisms of the private LPMCL club is also another elephant in the room that mainstream media journalists have never adequately analysed and are unlikely to do so.

Now that ICBC Standard Bank has taken on the remaining term of the 10 year G4S lease that was vacated by Deutsche Bank, the key questions for ICBC are to what use will the state-controlled Chinese bank put this precious metals vault to, and whether the 5 incumbent LPMCL members will formally (along with the Bank of England informally) give the go-ahead to allow ICBC become a member of the private syndicate that is London Precious Metals Clearing Limited. The other outstanding question is whether Standard Chartered will also be involved in any extension of membership of LPMCL.

Another little appreciated fact is that during the pitches for the replacements to the Gold Fixing and Silver Fixing auctions, most of the exchanges and companies making the pitches, such as, CME, LME, ICE, all offered working solutions that included centralised on-exchange clearing of precious metals for the London Gold and Silver Markets. These solutions were even included in the various presentation materials of CME, ICE and LME, and made it into market presentations and press releases etc, however, the LBMA and its various associated accomplishes such as the LPMCL, pushed back completely on any part of solution that would have encroached on the existing LMPCL clearing mechanism.

The question of why LMPCL was so ‘precious’ that it needed protection from a transparent on-exchange clearing platform is also a question that mainstream financial journalists seem to have entirely missed. I will write a future blog post on LPMCL so as to shed some light on this thoroughly protected private syndicate of bullion bank clearers.


The Keys to the Gold Vaults at the New York Fed – Part 3: ‘Coin Bars’, ‘Melts’ and the Bundesbank

Part 1 of this series reviewed Federal Reserve Bank of New York (FRBNY) publications that cover the Fed’s gold storage vaults in Manhattan, and illustrated how the information in these publications has been watered down over time. Part 1 also showed that the number of foreign central bank customers storing gold with the FRBNY has fallen substantially since the late 1990s.

Part 2 covered the Fed’s rarely discussed ‘Auxiliary Vault’ and suggested that this auxiliary vault of the Fed is probably located in the neighbouring Chase Manhattan Plaza vault facility, now run by JP Morgan.

Part 3 now looks at ‘Coin Bars’, another rarely discussed topic which is relevant to the gold at the New York Fed and that may well explain why the Deutsche Bundesbank needed to melt down the majority of the gold that it has so far repatriated from New York.

‘Coin bars’ is a bullion industry term referring to bars that were made by melting gold coins in a process that did not refine the gold nor remove the other metals or metal alloys that were in the coins. The molten metal was just recast directly into bar form.

Because it’s a concept critical to the FRBNY stored gold, the concept of US Assay Office / Mint gold bar ‘Melts’ is also highlighted below. Melts are batches of gold bars, usually between 18 and 22 bars, that when produced, were stamped with a melt number and a fineness, but were weight-listed as one unit. The US Assay Office produced both 0.995 fine gold bars and coin bars as Melts. The gold bars in a Melt are usually stored together unless that melt has been ‘broken’.

New York Fed – Coin Bars ‘Я’ Us

I think it’s critical to note that a reference to low-grade ‘coin bars’ in the 1991 version of the Fed’s ‘Key to the Gold Vault’ (KTTGV) has been omitted in subsequent additions of KTTGV.

The text in this 1991 ‘Key to the Gold Vault’ is based on older versions of the same publication that go back to the original version written by Charles Parnow in 1973. See Part 1 for discussion of Charles Parnow and the editions of the KTTGV and the ‘A Day at the Fed‘ publications.

The reference to coin bars in the 1991 version of KTTGV is as follows:

The butter yellow bars in the vault are nearly 100 percent pure and are usually made of newly mined gold.

Reddish bars contain copper and other impurities and generally consist of melted gold coins and jewellery containing alloys. Since 1968, a number of these “coin” bars, dating back to the early 1900s, have been stored in the Bank’s vault.

Silver and platinum impurities make gold white; iron produce shades of green.” (KTTGV 1991)

In comparison, the 1998 and later versions of KTTGV have omitted the reference to ‘coin bars’, and the discussion about gold bars and other metals has been shortened as follows:

Traces of silver and platinum give the gold a whitish shade, copper is most often found in reddish bars, and iron produces a greenish hue.

The butter-yellow bars in the vault are made of newly mined gold.” (KTTGV 1991, 2004, 2008)

There is also no mention of coin bars on the current NY Fed gold information page here. This is despite the fact that there are still coin bars held in the Fed’s New York gold vaults, as illustrated by the US Treasury’s gold bar inventory weight lists at the FRBNY. See below.

New York Fed at night

What exactly are Coin Bars?

In the early 20th century, a lot of countries were on a gold standard and gold coins circulated as part of the money supply, for example in Germany, the US, France and Britain. When countries went off the gold standard (or went off a circulating gold standard), some of these gold coins were melted down into bars in the 1920s and early 1930s.

Historically, gold coins that circulated as money were not made of pure gold since other metals (about 10%) were added to the gold to improve the coin’s strength and durability. So if a batch of coins contained 90% gold and 10% of other metals, the bars made by melting these coins would contain 90% gold and 10% other metals, since no refining of the gold was undertaken after the coins were melted.

Because coin bars were being made in the early 1930s, the London Gold Market (a precursor of the London Bullion Market Association (LBMA)) included an exact definition for coin bars in its 1934 London Good Delivery List, in addition to gold bars of 995 (or above) fineness.


Specification of bars acceptable on the London Gold Market

1. Gold bars conforming to the following specification are Good Delivery in the London market:

(a) Fine bars, i.e. bars assaying 995 per mille or over and containing between 350 and 430 ounces of fine gold;

(b) Coin bars, i.e. bars assaying 899 to 901 per mille or 915 1/2 to 917 per mille and containing between 350 and 420 ounces of fine gold; provided that they bear the stamp of the following:”

(Source: The London Good Delivery List – Building a Global Brand 1750 – 2010)

The 1934 definition specified that if a coin bar was produced by one of nineteen European mints or the United States Assay Office, then it was considered a ‘good delivery’ gold bar at that time. The European mints spanned Britain, France, Germany, Belgium, Holland, Sweden and Switzerland.

The specification of coin bars with a gold content (or fineness) of between 899 to 901 in the definition allowed the inclusion of gold coins from Continental Europe such as French Napoleon coins which had this particular gold content. The gold content of some US gold coins also fell within this range since they were made of 0.899 or 0.9 gold.

The 915 ½ to 917 range was included in the definition since 22 carat gold is 22/24 or 0.91667. This 22 carat gold, known as crown gold, was used in various gold coins such as British Sovereigns, and also some US gold coins.

But coin bars were in some ways a historical anomaly or a product of their time. Even at launch in 1919, the London gold fixing was a price quotation for 400 oz bars of 995 fineness. As gold expert Timothy Green said in the book “The London Good Delivery List – Building a Global Brand 1750 – 2010″ about the 1919 gold fixing launch:

the (fixing) price was now quoted for 400-ounce / 995 Good Delivery bars, rather than the traditional 916 standard coin bars which rapidly became extinct as minting of coin virtually ceased.” 

In the 19th century and very early 20th century, some refineries used to specifically produce ‘916 standard’ coin bars back that were used as a source to make gold coins. But the now famous 400 oz fine gold bars had been accepted by the Bank of England since 1871 when Sir Anthony de Rothschild convinced the Bank of England to accept them. The Bank of England had also begun to accept US Assay Office 400 oz bars of 995 fineness (fine bars) in 1919.

There do not appear to have been that many coin bars made in the early 1930s when mints melted down gold coins. In his book, Green cites a 1930 example of the Royal Mint in London embarking on a 2 year programme to melt down 90 million British Sovereigns (916.7 fine gold coins) into 52,000 bars each weighing 450 ozs. This is about 650 – 700 tonnes of gold. Each of these bars was stamped with the stamp of the Royal Mint as well as the fineness and a serial number on each bar.

Green also explains that although in 1936 the London Gold Market produced an updated good delivery list that added some additional refineries and mints to the 1934 list, there did not seem to be a lot of coin bars produced. Green says:

“The inclusion of mints (in the 1936 list) is interesting, suggesting that some like the Royal Mint in London, were melting coin, but there is little evidence of any producing significant quantities of bars.”

By the late 1920s, gold bar demand had shifted to central banks who wanted fine gold bars for their vaults. Green says that by 1929, 90 per cent of ‘monetary’ gold resided in these central bank vaults.

(Source:  “The London Good Delivery List – Building a Global Brand 1750 – 2010. Authors: Timothy Green (Part I) and Stewart Murray (Part II). Published by the LBMA, 2010)

Roosevelt’s Coin Bars

Apart from melted coins from Europe, there is another significant source of coin bars, namely the coin bars produced from US gold coins that were melted down during the US gold confiscation period circa 1933-1934.

Some of the US Treasury’s coin bars originated from this gold coin confiscation and melting period, and these coin bars were then shipped to the US Mint’s Fort Knox facility in Kentucky when it opened in 1937.

The authoritative source for information on the different producers of gold bars worldwide is a company called Grendon International who have a web site called http://www.goldbarsworldwide.com. This web site produces guides explaining the whole spectrum of gold bar varieties. In its US Assay Office gold bar guide, Grendon states:

“It is understood that the bars (produced by the US Mint / AssayOffices) had a minimum purity of 995+ parts gold in 1,000 parts, with the exception of those 400 oz bars that contained “Coin Gold”.

“Coin Gold” 400 oz bars were manufactured by melting down and then casting into bars gold coins that had been withdrawn from public circulation, mainly as a result of the prohibition in 1933 of private gold ownership in the United States. The gold purity of these bars reflected the purity of U.S. gold coins, usually 900 or 916 parts gold in a 1,000 parts. 

Roosevelt news
In an article about the US confiscation and the US coins that were actually melted, lawyer and coin expert David Ganz demonstrates that there were not a large amount of US gold coins melted by the US authorities in the 1930s.

In his article, Ganz has a table showing the total number of gold coins minted and melted over the 1930s, classified by coin denomination up to the $20 coin. Given that the $20 coin has 0.9675 ounces, and the $10 has 0.48375 ounces etc, you can work out the total number of millions of ounces that were produced from melted coins. Ganz says:

Product of gold confiscation was gold melting; the coins were melted into bricks that ultimately found their way to Fort Knox. Although the Mint had a program from the mid-1860’s until about 1950 to melt or re-coin copper, silver and gold coinage, the majority of gold coins were taken in and destroyed in a Seven year period (1932-1939)“.

Ganz’ statistics come directly from the annual reports of the Treasury’s Director of the Mint. Ganz says “All told, over 124 million coins were melted through the years (102 million gold coins were melted as a result of government assistance from 1933- 1939).”

However when you calculate the amount of gold in these 124 million coins, it only works out at about 85.6 million fine ounces, which is 2,662 tonnes of gold.

Some of the European coin bars made it across the Atlantic circa 1934 when the US raised the price of gold to $35 per ounce and the US Treasury offered to buy all gold at this price, including coin bars from the London Gold Market.

All gold arriving into the US Treasury’s assay offices was apparently remelted into US Assay Office bars but statistics on how many European coin bars entered the US market at that time do not seem to be available.

Since there were not that many European coin bars made by European mints in the 1930s (for example, the Royal Mint 1930 programme made only 650-700 tonnes of coin bars), then there cannot have been more than a few thousand tonnes of European coin bars entering the US at that time.

 999.5 US Assay Office
Coin Bars ceased to be ‘Good Delivery’ bars in 1954

During World War II the London Gold Market essentially closed down and really only re-opened in March 1954 when the Gold Fixing restarted. When the London Gold Market re-opened, a  new 1954 London Good Delivery List for gold was published. This list only included gold bars of 0.995 fineness or higher, and coin bars ceased to be London good delivery standard. As Stewart Murray, former LBMA CEO says: “The new List published in 1954 only allowed fine bars of 995+.” (page 40, “Good Delivery Accreditation – A Short History”).

It’s therefore very strange that the Fed’s 1991 ‘Key to the Gold Vault’ publication states that it was only “since 1968″ that  “a number of these ‘coin bars’, dating back to the early 1900s, have been stored in the Bank’s vault.” This implies that coin bars were not at the New York Fed gold vaults immediately prior to 1968.

Why would these coin bars suddenly appear at the FRBNY vault in 1968? To answer this question, its important to recall that 1968 was the year in which the London Gold Pool collapsed (March 1968).

Since coin bars have not been good delivery bars since 1954, US Treasury coin bars appear to have begun to turn up in the New York gold vaults in 1968 because there was a shortage of good delivery US Assay Office gold bars to satisfy foreign central bank gold transaction settlements.

Scraping the barrel – March 1968

That the US Treasury and Federal Reserve had a major shortage of good delivery gold in March 1968 is illustrated by a Bank of England memo from 14th March 1968, which highlights that the London Gold Pool collapsed because the US monetary authorities were unable to find any good delivery gold in their own stocks, and were confronted with the prospect of having to supply their Fort Knox low-grade ‘coin bars’ to the market.

The Bank of England memo, titled ‘Gold Bars for Delivery in the London Market‘ was written by George Preston (LTGP) and addressed to the Deputy Governor Maurice Parsons and the Chief Cashier John Fforde. It discussed the ramifications of delivering coin bars to the London Gold Market. The memo is referenced as entry ’49’ from file C43/323 i.e. C43/323/49.

Points 1 and 2 in the memo described what was good delivery at that time in 1968, and are included here to illustrate that coin bars were not even being countenanced as good delivery back in 1968. No one had even thought about coin bars since the 1930s.

However, Point 3 is the critical point. A short quote from the memo:

“1. The current specification of bars which are good delivery in the London market requires that they shall be of a minimum fineness of .995 and shall have a minimum gold content of 350 fine ounces and a maximum of 430 fine ounces.”

“2. In the 1930s when the Bank were delivering bars to the market to satisfy French demands for gold, they had to deliver coin bars and the specification in the 1930’s included bars not only .995 fine but coin bars assaying between .899 and .901 and also .915 1/2 to .917. Bars of both varieties had to contain between 350 and 430 ounces of fine gold.”

“3. It has emerged in conversations with the Federal Reserve Bank that the majority of the gold held at Fort Knox is in the form of coin bars, and that in certain cases these bars have a gold content of less than 350 fine ounces. If the drain on U.S. stocks continues it is inevitable that the Federal Reserve Bank will be forced to deliver what bars they have.

Capacity to further refine coin bars to the current minimum fineness of .995 in the United States is entirely inadequate to cope with conversion on the scale that would be required if the Americans wished to continue to deliver bars assaying .995 or better. Equally the capacity in the U.K. is inadequate for this task.”

The Fed asked the Bank of England to discuss the situation with Rothschilds (the chair of the gold market) at partner level. The memo then covers some discussion with Mr Bucks and Mr Hawes of Rothschilds about the acceptability of delivering coin bars to the London Gold Market. Supplying the market with coin bars was thought by the Bank and Rothschilds to be problematic, and the memo concluded, somewhat ominously:

it would appear that the circumstances might well be such that very few bars of the current acceptable fineness could be found” (by the Americans)

Ominously, because, as some readers will be aware, the London Gold Pool collapsed that evening, Thursday 14th March 1968. On the following day, 15th March 1968, an emergency bank holiday was called for British financial markets, the London gold market remained closed (and stayed close for the next two weeks), and the gold price began to float for non-official transactions.

Migration of Coin Bars from FRBNY to the Bank of England

That foreign central banks were provided with coin bars at the New York Fed is a fact, as illustrated by the following.

In 2004, speaking at a conference of the American Institute for Economic Research (AIER), (AIER Conference May 2004 Gold Standard), H. David Willey, formerly of the Federal Reserve Bank of New York,

Gold held by foreign authorities under earmark at the Federal Reserve Bank of New York may be in the form of coin bars only approximating 400 ounces and with a much lesser purity.

In the last decades, there has been a gradual migration of central bank coin bars from the New York Federal Reserve vaults to the Bank of England. These bars have been first re-refined into London good delivery form. Once at the Bank of England, the bars can readily be used for gold loans or sales.

H. David Willey was “formerly Vice President of the Federal Reserve Bank of New York in charge of the discount window, and later responsible for oversight of the Federal Reserve’s accounts (including gold) with foreign central banks (1964-82); advisor to Morgan Stanley’s gold and fixed-income business (1982-2000).

(Source: Page 62: https://www.aier.org/sites/default/files/publications/GC%20%2704%20-%20Text.pdf)

A central bank would only be confronted with a need to convert its FRBNY coin bar holdings to good delivery gold and move them to London if it didn’t have any 995 fine gold at the FRBNY. As to how many banks engaged in this activity and sent their coin bars to the refineries is unclear.

US Treasury coin bars

While some foreign central banks seem to have tried to get rid of their non-good delivery coin bars over the years by having them melted down, there are still coin bars held in the New York Fed vault(s).

The US Treasury claims to hold gold at four locations, namely Fort Knox in Kentucky, Denver in Colorado, West Point in up-state New York, and at the Federal Reserve Bank of New York in Manhattan, NY.

According to the US Treasury’s own full gold inventory schedule (which have never been independently and physically audited), over 80% of the US Treasury gold bars listed are not good delivery bars and are in the form of coin bars and other low fineness gold bars. See pdf here for a detailed list of the gold the US Treasury claims to hold at Fort Knox, Denver and West Point. An excel version of the US Treasury list is here in xls.

There is a neat table summarising the weight and purity of the US Treasury’s gold bar ‘lists’ here, taken from the goldchat blog site.

There has been very little gold bar activity in or out of Fort Knox since 1968. If there was nothing, or next to nothing, except coin bars at Fort Knox in March 1968 (as the FRB told the Bank of England in March 1968), then how could there now be over 147 million ozs of gold (over 4,500 tonnes) at Fort Knox if its all or nearly all in the form of coin bars? The numbers don’t add up.

Said another way, if the US melted around 2,600 tonnes of US gold coins in the 1930s into coin bars, and if some European coin bars were converted into US Assay Office coin bars (also in the 1930s), how could this add up to even 4,500 tonnes, let alone add up to all the coin bar gold that the US Treasury claims to hold at Fort Knox, Denver and West Point combined, and all the coin bars held by foreign central banks at the FRBNY?

Historical Melts FRBNY

US Treasury coin bars at the FRBNY

Surprisingly, the US Treasury lists how many coins bars it holds at the FRBNY. According to its custodial inventory statement, about 5% of the US Treasury’s gold is held at the FRBNY in the form of 31,204 bars stored in 11 compartments (listed as compartments A – K).

The US Treasury gold claimed to be stored at the FRBNY is listed in weight lists here, starting on page 132 of the pdf (or page 128 of file).

FRBNY - Schedule of Inventory of Gold Held by US Treasury at FRBNY - New

Of the US Treasury’s eleven compartments listed at the FRBNY, coin bars are listed as being held in four of these compartments, namely compartments H, J, K and E.

Compartment H of the US Treasury’s gold at the FRBNY contains coin bars produced by the US Assay Office. These bars are listed in ‘melts’, with more than 60 melts listed, each with about 20+ bars. This would be in excess of 12-13 tonnes. See the following screenshots as examples.

FRBNY Compartment H - coin bars of the US Treasury - New

FRBNY Compartment H - coin bars of the US Treasury B - New

All the bars listed in the Treasury’s Compartment J are US Assay Office coin bars, listed in melts. This amounts to 968,000 fine ounces, or about 30 tonnes. See the following two screenshots.

FRBNY Compartment J - coin bars of the US Treasury 1 - New

FRBNY Compartment J - coin bars of the US Treasury 2 - New

Compartment K also contains about 5 tonnes of coin bars belonging to the US Treasury. Screenshot not shown for brevity.

Additionally, Compartment E contains approximately 1 tonne of coin bars that are not US Assay Office coin bars. These coin bars are listed as being produced by refiners such as Marret-Bonnin, Rothschild, Comptoir-Lyon and the Royal Canadian Mint. All four of these refiners were listed on the 1934 Good Delivery List of refiners of coin bars.

FRBNY Compartment E - non US Assay Office coin bars of the US Treasury B - New

FRBNY Compartment E - non US Assay Office coin bars of the US Treasury C - New

Source: http://financialservices.house.gov/uploadedfiles/112-41.pdf

Overall, a quick calculation of the above weight lists suggests that the US Treasury holds about 50 tonnes of coin bars at the New York Fed. Interestingly, this is roughly the same amount of gold that the Bundesbank says that it melted/smelted in 2014 after repatriating it from the New York Fed.

Melt Bars stacked

US Assay Office 0.995 fine bars vs US Assay Office coin bars

Its important to understand the difference between good delivery US Assay Office gold bars and US Assay Office coin bars (circa 0.90 fine). US Assay Office gold bars that have a gold content of 0.995 fine or higher are still good delivery in the London Gold Market and in international transactions because US Assay Office 0.995 bars are still on the ‘former’ London good delivery list.

The LBMA’s London Good Delivery List is a list of refineries worldwide whose gold bars are acceptable by the London Gold Market. This list contains two parts, a current list and a former list. The former list includes refineries whose gold bars are still accepted by the London Gold Market but who no longer produce these gold bars.

In September 1997, the LBMA transferred ‘US Assay Office’ gold bars to the former list because they were no longer produced by the US Assay Office after this date. These are bars that were produced by the New York Assay Office and the San Francisco and Denver Mints.

Gold bars that are on the former list are still accepted as London Good Delivery as long as they have been produced prior to the date of transfer to the former list, and as long as the bars meet the London Good Delivery standards.

Therefore, US Assay Office gold bars (995 fine) are still accepted as London good delivery bars. Just look at the bar list for the SPDR Gold Trust (GLD) and you will see plenty of US Assay Office gold bars listed. These bars have appeared at various times recently with a variety of descriptions such as ‘US ASSAY OFFICE NY’, ‘U.S Assay Office’, ‘United States Assay Offices & Mints’, ‘US ASSAY OFFICE NEW YORK’, ‘UNITED STATES ASSAY OFFICE’ etc etc.

US Assay Office gold bar MELTS

Its important to grasp what a MELT is as applied to US Assay Office Gold because it applies to a lot of the gold held at the FRBNY vaults. Non US refineries and mints also produced gold bars in batches but they didn’t make use of a melt numbering system in such an obvious way as the US Assay Office.

Here’s the Federal Reserve Board explaining 0.995 Melts:

“US Assay Office bars, like bars in other countries, are produced in melts or a series of bars, numbered in succession. For instance, melt No. I contains 20 bars. Hence, the bars are stamped 1-1, 1-2, etc… , 1-20.”

“US Assay Office bars are gold bars that are originally issued by the US Assay Office and that have not been mutilated and which, if originally issued in the form of a melt, are re-deposited as a complete melt. These bars are not melted and assayed. They weigh approximately 400 troy ounces, the fineness of their gold content is .995 (99.5% purity or better), and they come in complete melts.

“When an US Assay Office bar is removed from a melt, it is referred to as a mutilated US Assay Office bar.”

Source: ‘Final report of the gold team’, draft June 30th, 2000. Page 13 of document: (http://www.clintonlibrary.gov/assets/storage/Research-Digital-Library/holocaust/Holocaust-Theft/Box-227/6997222-final-report-of-gold-team.pdf)

Here’s a very good description of Melts from none other than the International Monetary Fund. This description comes from an IMF document in 1976 when they were preparing their gold auctions and restitutions:

“..most of the gold of the Fund (IMF) is not in the form of individually stamped and weighed bars but consists, with the exception of the gold held in depositories in the United Kingdom and India, of melts, comprising 18-22 individual bars, which will first need to be identified, weighed, and selected before they can be delivered. 1/ “

Footnote 1/ on the same IMF page describes ‘Melts’ as:

“1/ A melt is an original cast of a number of bars, usually between 18 and 22. The bars of an unbroken melt are stamped with the melt number and fineness but weight-listed as one unit; when a melt is broken, individual bars must be weighed and stamped for identification. It is the practice in New York and Paris to keep melts intact.”

Swiss National Bank refining operations

The Swiss National Bank (SNB) admits that it too has held non-good delivery gold, and has sought, over a 30 year period from 1977-2007, to get it refined to good delivery status:

The National Bank has commissioned numerous refining operations during the last thirty years in order to obtain the ‘good delivery’ quality label for its entire gold holdings.

Swiss gold refining firms were prepared to undertake these operations free of charge, as the SNB provided them, in return, with a ‘working capital’ of several tonnes – more than was strictly necessary for their activity on behalf of the central bank.

This mutually profitable arrangement was challenged in 1982, when the SNB’s legal services concluded that it raised a number of problems, in particular that it effectively constituted an unsecured advance, similar to a gold loan. The National Bank’s deposits with refining firms were therefore liquidated in the same year, and subsequently, the cost of refining operations was invoiced directly to the SNB.

(page 433, section 8.2 The National Bank’s gold operations, from the 800+ page publication “The Swiss National Bank 1907 – 2007” (large file: 800+ pages.)

The SNB  had a lot of gold at the FRBNY up until at least the mid to late 1990s (since there are large FRBNY gold outflows during that period), and the Swiss gold sales appear to have targeted this New York gold, however, the Swiss gold sales settled out of London so it looks like Swiss gold may have been on the move in the late 1990s, even before the SNB had got the go-ahead to engage in gold sales over the 2000-2004 period. Perhaps the SNB’s Swiss refinery operations cited above involved some of the SNB’s New York gold as it stopped off in Switzerland on its way to London?

The Curious Case of the German Bundesbank

There has been widespread coverage of the Deutsche Bundesbank’s attempts to repatriate some of its gold reserves from New York and Paris back to Frankfurt. A lot of this coverage is, in my view, failing to ask the right questions about the fineness of the gold bars repatriated.

In January 2014, the Bundesbank announced that it had repatriated a paltry 5 tonnes of gold from the New York Federal Reserve Bank during 2013.

The Bundesbank press release from 20th January 2014, quoted Bundesbank Executive Board member Carl-Ludwig Thiele as follows:

‘”We had bars of gold which did not meet the ‘London Good Delivery’ general market standard melted down and recast. We are cooperating with gold smelters in Europe,” Thiele continued. The smelting process is being observed by independent experts. It is set up in such a manner that the Bundesbank’s gold cannot be commingled with foreign gold at any time.’

Since the Bundesbank is fond of using the term ‘smelting‘ and ‘smelters‘ in their gold bar discussions, what exactly does ‘smelting’ mean?

SMELT dictionary definition: Smelt (verb):

1. to fuse or melt (ore) in order to separate the metal contained

2. to obtain or refine (metal) in this way.

To me, it appears that the Bundesbank melted down and refined coin bars into London Good Delivery bars, otherwise why else would they need to bring gold up to good delivery standard? After all, normal US Assay Office gold bars of 0.995 fineness are already good delivery. So I emailed the Bundesbank at that time (January 2014) and asked them straight out:

How many tonnes of coin bars does the Bundesbank hold at the Federal Reserve in New York in addition to the 5 tonnes of coin bar gold recently remelted? And will all the gold (circa 300 tonnes) that is planned to be brought back from New York be in the form of coin bars? Regards,

The Bundesbank replied, directing me back to their press release:

in the Link attached you will find more information about your matter.

Since I had asked about ‘coin bars’ and the Bundesbank had sent me a link to the press release about smelting, could the Bundesbank have been conceding that the smelting was of coin bars? Quite Possibly.

On 19th February 2014, Carl-Ludwig Thiele popped up again referring to the  ‘smelting’ operation in an interview conducted with German newspaper Handelsblatt:

Some of the bars in our stocks in New York were produced before the Second World War.”

“Our internal audit team was present last year during the on-site removal of gold bars and closely monitored everything. The smelting process is also being monitored by independent experts.”

“The very same gold arrived at the European gold smelters that we had commissioned.”

“The gold was removed from the vault in the presence of the internal audit team and transported to Europe. Only once the gold had arrived in Europe was it melted down and brought to the current bar standard.”

The frequent use of the words ‘smelting’ and ‘smelters’, in my opinion, suggests that not only were the Bundesbank’s gold bars melted and reformed into fresh bars, but that the gold was smelted and refined from a lessor purity to a ‘good delivery’ purity. This is why the opaque manoeuvres of the Bundesbank suggest ‘coin bars’.

Thiele’s reference to “some of the bars in our stocks in New York were produced before the Second World War” is again hinting at the 1930s, and to me is clearly suggesting ‘Coin Bars’.

Bundesbank bar display

From 5 to 50 tonnes

The 2013 five tonne smelting mystery was merely a prelude to much more of the same in 2014, because in January 2015, the Bundesbank issued a press release in which it claimed to have repatriated 85 tonnes of gold from the FRB in New York, of which approximately 50 tonnes was melted and recast.

Smelting/Melting expert Carl-Ludwig Thiele was again on hand to explain:

“The Bundesbank took advantage of the transfer from New York to have roughly 50 tonnes of gold melted down and recast according to the London Good Delivery standard, today’s internationally recognised standard.”

I then emailed the Bundesbank and asked:

“The Bundesbank press release from yesterday (see link below) refers to the fact that 50 tonnes of gold that was repatriated from the Federal Reserve in New York was recast / remelted before being received by the Bundesbank.

Can you clarify what the gold fineness (parts per thousand of gold in the bars) of these 50 tonnes of bars was before they were recast / remelted?


The Bundesbank replied to my email:

“Please understand that we do not provide any information on the physical details of single gold bars owned by Deutsche Bundesbank. Nevertheless, we would like to draw your attention on the fact that no irregularities where found concerning the gold melted down and recast according to the London Good Delivery standard. Please take into account that this standard asks i.a. for a minimum fineness of 995 parts per thousand.

(i.a.= inter alia = among other things)

Notwithstanding that I didn’t ask about single gold bars, its very interesting that the Bundesbank mentions 995. Why mention the fineness of 995? If the bars were already 995, why melt them down in the first place?

I then sent the Bundesbank a follow-up email:

“Thanks for the reply but I wasn’t asking about the details of single gold bars. 

My question is what was the average fineness of the 50 tonnes of gold bars that the Bundesbank had remelted in 2014. That’s the average fineness on approximately 4,000 bars. 

The Bundesbank replied:

“Please understand that we do not provide any further information on the
details of specific gold bars or a specific amount of gold bars owned by
Deutsche Bundesbank.”

In my view, the Bundesbank’s complete secrecy on this smelting issue speaks volumes. And you also see now that the Bundesbank cannot give a straight answer when asked simple questions about its gold.

In both January 2014 and January 2015, the Bundesbank claims that the Bank for International Settlements (BIS) was in some way involved in the Bundesbank’s gold smelting shenanigans. This makes little or no sense unless there was some type of location swap involved or the BIS has some deal with a refinery such as Metalor in Neuchâtel.

In January 2014 Thiele said:

“The Bundesbank has repatriated the gold from New York City in close cooperation with the Bank for International Settlements. “The Bank for International Settlements is a repository of expertise in the repatriation of gold. It is a very trustworthy institution.”

In January 2015 Thiele said:

“We also called on the expertise of the Bank for International Settlements for the spot checks that had to be carried out. As expected, there were no irregularities.”

Carl-Ludwig Thiele

The BIS trades gold ‘loco Berne’ using its account at the Swiss National bank (SNB) vaults, and the BIS maintains safekeeping and settlements facilities that are “available loco London, Berne or New York.”

Bundesbank gold looks like it left the FRBNY vaults during 2013 and 2014 in batches of 5.16 tonnes. See the Fed’s foreign earmarked gold statistics here. But on a net basis there is a shortfall of about 32 tonnes in 2014  between the amount of gold that left the FRBNY vaults and the amount of gold that the Bundesbank and De Nederlandsche Bank combined claim that they repatriated from the FRBNY during 2014.

Therefore, there may have been a gold location swap involved somewhere along the line. For some of the Bundesbank’s melting operations, gold may not have moved physically from the FRBNY at all. A gold location swap could have been done between a BIS FRBNY gold account and a BIS SNB gold account. Since the gold needed to be remelted / recast (to bring it to good delivery status), that would mean there were coin bars at the SNB.

The Metalor gold refinery (one of the 4 big gold refineries in Switzerland and one of the 6 biggest in the world) is very near the SNB’s Berne vault. Its located at Neuchâtel, about 50kms from Berne. The three other large Swiss gold refineries are all quite far from Berne as they are situated in southern Switzerland near the Italian border within a mile or two of each other, (Valcambi is in Balerna, Pamp in Castel San Pietro, and Argor-Heraeus is in Mendrisio).

If the BIS did some location swaps between the FRBNY and the SNB, it could get coin bars at the SNB vaults remelted at Metalor and then get the new gold bars flown to the Bundesbank in Frankfurt.

This would prevent the need to fly gold from New York City, and it would explain the “close cooperation” of the BIS in the operations.

Going Dutch

In contrast, that other great gold repatriating nation of 2014, namely the  Netherlands, did not see the need to melt any of the bars that it repatriated. In its press release in November 2014, the De Nederlandsche Bank simply said they had repatriated their gold to Amsterdam, apparently in quite a quick fashion.

And why would the Dutch need to melt anything, since after all, their gold in New York was in 995 Melts, as confirmed by Dutch Central Bank official Jan Lamers.

Here is Lamers in 2005 talking about the DNB’s gold bar holdings at the FRB, which were held in normal US Assay Office Melts:

“The New York stock does not meet the standards prevailing on the international gold market, the so-called London “good delivery” standards. The biggest difference is that the bars in New York are not individualized, but are part of a package of about 20 bars, wherein the package as a whole has an overall weight and number. The bars in the package would need to be weighed and numbered individually to meet ‘good delivery’ standards.”

I translated the above, so here is the original Dutch from Lamers:

“De voorraad in New York voldoet echter niet aan de standaarden die gelden op de internationale goudmarkt, de zogenoemde Londense ‘good delivery’ standaard. Het grootste verschil is dat de baren in New York niet zijn geïndividualiseerd, maar onderdeel zijn van een pakket van circa 20 baren waarbij het pakket als geheel een gewicht en nummer heeft. Door de baren in het pakket individueel te wegen en te nummeren, konden deze op‘good delivery’ standaard worden gebracht.”

(Source: “Gold Management of the Bank” by Jan Lamers, Senior Policy, Financial Markets Division. http://web.archive.org/web/20081117183716/http://www.dnb.nl/binaries/goudbeheer%20van%20DNB_tcm46-146095.pdf pages 7-8 of the pdf.)

So, the fact that the Dutch didn’t need to smelt anything but the German’s did shows that the bars that the Germans sent to the European Smelters were not regular 995 fine US Assay Office bars. If the Germans had possessed 995 US Assay Office bars, they would just need to be weighed and individually stamped with their weights, not melted down and recast.

The fact that the Bundesbank will not publish any weight lists is very suspicious. Even the US Treasury published their weight lists of their bars held at the FRBNY (see above).

Peter Boehringer, of the German ‘Repatriate our Gold’ campaign, says that allegedly, the bar lists of the gold that the Bundesbank had melted have now been destroyed. If this has happened, then this is further bizarre behaviour from the Bundesbank.

There are various other theories apart from ‘coin bars’ as to why the Bundesbank may have wanted to melt down gold bars from New York but the other alternatives are also embarrassing to the bar holder.

The old bars may have had cracks or fissures in them. This has happened to some of the old gold that is stored in the Bank of England as this report from 2007 shows.  The Bank of England spokesman at the time said:

“This is not about purity, this is about physical appearance.”

Speaking of Peter Boehringer, a recent Bloomberg article from February 2015 about Boehringer and the Bundesbank gold quoted a Bundesbank spokesman as telling Bloomberg, on the subject of gold melting, that:

meeting the London good delivery standard “cannot be reduced entirely to the weight of a gold bar but needs to take various other features into account, one criterion being the outer appearance.”

However, this Bloomberg article is the first time that the Bundesbank has mentioned ‘appearance’ of bars, and to me it looks like a story that keeps changing, possibly with some inspiration from the Bank of England 2007 story.

Cracks and fissures in 55 tonnes of gold would be quite alarming given that the LBMA said that ‘defects’ are ‘fortunately not typical!’ (see slide 13 here), and this would throw the quality of all the Fed’s New York held gold into doubt.

The quality of US Assay Office 995 fine bars was seen to be less than perfect by London refiners in 1968, as demonstrated by this 2012 article from Zerohedge, but if the Bundesbank was melting down US Assay Office 995 fine bars this would also be an alarm bell for all holders of similar gold. And why would the Dutch not think its necessary to melt down their repatriated US Assay Office bars if the Germans thought this was a problem?

The Bundesbank gives some details of a gold swap with the FRB back in 1968, and claim that a portion of the gold returned to the  Bundesbank (the return leg of the gold swap) was gold of a lessor quality than good delivery. They say “the remaining bars with a countervalue of $750 million were of a different quality”. This is absolutely not correct. All of the gold bars returned to the Bundesbank in that potion of the swap were good delivery US Assay Office bars and a lot of it came from Ottawa where the Fed had sourced some bars from the Canadians.

I have the details on that swap from Bank of England gold ledgers and the 1,200 gold bars (sent to Johnson Matthey) out of over 50,000 bars shipped to London were merely being ‘adjusted’ into good delivery bars, and were supposed to be good delivery bars, hence the need to remelt and recast.  I will cover this Bundesbank gold swap in a future article. The Bundesbank seems to be using this gold swap as as some sort of ambiguous evidence of why they are melting down 55 tonnes of gold but it is misleading to do so.

So, in conclusion, I would lean towards the probability that the Federal Reserve Bank of New York has given the Deutsche Bundesbank tonnes of coin bars and the smelting operations have been bringing this gold up to London Good delivery purity levels. This begs the question, where did all the other Bundesbank gold bars stored at the New York Fed disappear to?

The alternative to the coin bar thesis, that the Bundesbank does not trust the gold purity of supposedly 995 fine US Assay Office bars, is probably more concerning since it undermines confidence in the purity levels of all US Assay Office fine gold Melts.

The Keys to the Gold Vaults at the New York Fed – Part 2: The Auxiliary Vault

The FRBNY’s Auxiliary Vault

As mentioned in Part 1 of Keys to the Gold Vaults at the New York Fed, there are two gold vaults at the New York Fed, the main vault and the auxiliary vault. Very little is written anywhere about the FRBNY’s auxiliary vault, or the ‘aux vault’ as it has sometimes been referred to.

The auxiliary vault also fails to make an appearance during the New York Fed’s famous gold vault tour. It’s as if the Fed specifically wants to keep this aux vault off the radar, or at least flying under the radar.

Although neither the 1991 nor the 1998 versions of the Fed’s publication ‘Key to the Gold Vault’ (KTTGV) refer to the auxiliary vault, the 2004 and 2008 versions do (in passing) as follows:

Bullion at the Federal Reserve Bank of New York belonging to some 60 foreign central banks and international monetary organizations is stored in 122 separate compartments in the main and auxiliary vaults.” (page 5, 2004)

Bullion at the Federal Reserve Bank of New York belonging to some 36 foreign governments, central banks and official international organizations is stored in 122 separate compartments in the main and auxiliary vaults.” (page 5, 2008)

All four of the on-line versions of ‘Key to the Gold Vault’ that I sourced (from 1991 – 2008, see Part 1) state that the “main vault was opened in September 1924” and so this statement indirectly implies that there is another ‘non-main’ vault.

The reference to the auxiliary vault in the more recent 2004 and 2008 versions of KTTGV seems to imply that the aux vault is still in active use for gold storage. Otherwise, why would the Fed mention it?

Just to clarify what auxiliary means. Various dictionary definitions of ‘Auxiliary’ include the following: supplementary, additional, subsidiary capacity, backup reserve. In the context of space, auxiliary refers to additional space.

New York Fed writer Charles Parnow’s ‘A Day at the Fed – Charles Parnow’ publication (first published in 1973) explicitly refers to the auxiliary vault with a quite precise reference. This is probably the only detailed description of the auxiliary vault that’s on record, and it states:

A smaller auxiliary vault built in 1963 holds three accounts. One account with 107,000 bars of gold is stacked with bricklayer precision into a solid wall 12 feet high, 10 feet wide, and 18 feet deep.” (From: ‘A Day at the Fed’)


The above photo from the NY Fed shows a self-described ‘wall of gold’. If you look closely to the very left of the photo, the number ‘2’ is visible about half way up the white column beside the wall. This vault layout is very different to the small cages or compartments featured in most of the FRBNY’s gold vault photos. Therefore this wall of gold shot appears to be from a totally different location than the main vault.

Could this be a shot taken in the auxiliary vault? Most probably. Apart from the above photo, there are two additional photos below that I believe are also shots taken within the auxiliary vault. One shows 3 men with clipboards, presumably Fed staff and auditors, looking at a wall of gold. The other shots shows 2 Fed vault workers, with protective magnesium shoe covers, adding bars to a wall of gold, and out of shot a third person consulting some type of weight list.

If, in the early 1970s, when Charles Parnow’s above comment was first penned, the aux vault stored gold for only three customers, then the Fed may have simply just used three areas or alcoves in the aux vault, listed as 1, 2 and 3, in which to store customer gold for three customers. However, without knowing the vault layout its difficult to say.

Wall of Gold

This literal ‘wall of gold’ is also mentioned in the 1991 ‘Key to the Gold Vault’ but is attributed to a ‘compartment’ and there is no mention of the auxiliary vault. Another mysterious omission by the Fed. The comment is as follows:

The gold in compartment number 86, which faces the vault entrance, is arranged as a display. The compartment contains 5,160 bars valued at about $87.1 million at the official rate of $42.2222. Its capacity of about 6,000 bars makes it one of the smaller compartments.

The largest compartment contains about 107,000 bars—literally a wall of gold 10 feet high, 10 feet wide and 18 feet deep.”

(KTTGV 1991 – notice the dimensions quoted of the wall are slightly different in height to those specified in the previous specification 12 x 10 x 18).

As an aside, who would be holding 107,000 bars of gold (more than 1,300 tonnes) at the FRBNY back in 1973? By a process of elimination, I think it was the Swiss National Bank (SNB). This is so because, in my view, the only other realistic candidates that held so much gold in New York were the IMF and West Germany, and each of these customers held more than 1,300 tonnes of gold at the NY Fed at that time.

Tours of the Vault(s)

Since the FRBNY never really writes about the aux vault, I emailed the ‘Media Relations Department’ of the FRBNY last year (2014) and asked them to explain the reference to the auxiliary gold vault that was opened in 1963.

The Fed replied by email that “the auxiliary vault is a vault located near the main gold vault; hence it’s referred to as an auxiliary vault.

Not a very full answer, but at least it’s a confirmation from the NY Fed that there is an auxiliary vault and that it is located ‘near’ the ‘main gold vault’. And the Fed didn’t deny that it was opened in 1963.

When I worked in New York in 1999 my employer booked us a tour of the Fed’s gold vault. During the tour, there was no mention of the auxiliary vault and the gold vault visit just consisted of going into the entrance of the main vault where some gold was brought out from the weighing room for people to pass around.

The FRBNY gold vault tour (open to the public) is quite famous and has been written about extensively, but neither the promotional material for the tour nor the media coverage ever seem to mention the auxiliary vault.

Just to double check what the current tour covers, I recently emailed the Fed gold vault tour people and asked them if the auxiliary vault is included in the current tour in addition to the main vault. Their succinct reply was that “the tour covers the main vault“. Yet again, another very short reply  from the Fed and in this case no extra information about the auxiliary vault was volunteered.

Since discussion of the FRBNY’s  auxiliary vault is quite rare, its worth looking at the few web references to the aux vault which do exist.

One such reference about the aux vault comes from well-known New York writer Andrew Tobias who appears to have visited the auxiliary vault while on a private or customised tour of the NY Fed in June 2010. In his blog, Tobias wrote that “the door to the auxiliary vault weighs 30 tons, yet is so precisely balanced that I was able to swing it open and shut.”


Where is the Aux Vault?

The exact location of the FRBNY’s auxiliary vault appears to be something that the Fed doesn’t wish to discuss. It’s therefore interesting that there is a comment on the web that appears to state exactly where the aux vault is located.

In July 2002, a forum contributor called Woodman wrote in a bulletin board at www.freerepublic.com that the Federal Reserve aux vault is located at Level B5 of 1 Chase Manhattan Plaza.

While discussing the gold supposedly stored under the WTC, Woodman wrote “…all of the Gold stored in the WTC was really stored 3 blocks east in the basement vaults of the Federal Reserve Bank and the aux. at 1 Chase Manhattan Plaza B5.

For those not familiar, the vault at 1 Chase Manhattan Plaza (CMP) on the fifth sub-level (B5) is the famous Chase (now JP Morgan) vault, supposedly the largest bank vault in the world. Some of the details of this vault were uncovered in 2013 and can be read here on Zerohedge.

The interesting angle about the 2002 comment is that, how, in 2002, could someone refer to the Chase Manhattan Plaza (CMP) B5 vault as the aux (auxiliary) of the FRBNY vault unless they knew details about these two adjacent vaults?

Back in 2002, the Chase – JP Morgan merger had only just been completed the previous year, and JP Morgan’s 1 CMP B5 vault was not yet a licensed Comex depository for gold and silver (it only became Comex licensed in 2011). So, in 2002 the Chase (JP Morgan) vault wasn’t yet on the radar (even to the CFTC) as a JP Morgan Comex precious metals vault.

Therefore, in 2002, to refer to the FRB’s aux as 1 Chase Manhattan Plaza – B5, was a very specific statement.

To recap, the main Fed New York gold vault is in basement E of the fifth sub-level. The Chase vault is on B5, also on the fifth sub-level. Indeed, it was highlighted (via a ZeroHedge contributor) that there is a tunnel between the FRBNY and CPM vaults. While discussing the Fed’s gold vault facility, the contributor wrote:

Chase Plaza (now the Property of JPM) is linked to the facility via tunnel… I have seen it. The elevators on the Chase side are incredible. They could lift a tank.”

Ironically, this Zerohedge comment was originally posted to an article about ‘Key to the Gold Vault’, on 24th January 2012.

Given that the FRBNY auxiliary vault was opened in 1963, around the same time that 1 Chase Manhattan Plaza was completed, it would seem logical that the Fed’s aux vault was built in parallel with the construction of the Chase Manhattan Plaza vault.

Where Charles Parnow states that this auxiliary vault was ‘built in 1963’ he probably means opened in 1963, since like the main vault, although it was opened in 1924, it’s construction was part of a building project which took a few years over 1921-1923.

The Chase Manhattan Plaza building and vault construction project ran from around 1959 to 1963, and the Chase building was fully functional by 1963. Parts of the building were fully functional and occupied in 1962.

Working on a gold wall at the FRBNY

Mosler vault doors

The precisely balanced door of the auxiliary vault (referred to above by Andrew Tobias) sounds very different to the cylindrical design of the vault entrance of the main FRBNY vault, opened in 1924.

In the 1991 ‘Key to the Gold Vault’, the ‘door’ of the main vault is described as follows:

There are no doors into the gold vault. Entry is through a narrow 10-foot passageway cut in a delicately balanced 9-feet tall, 90-ton steel cylinder that revolves vertically in a 140- ton steel and concrete frame. The vault is opened and closed by rotating the cylinder 90 degrees so that the passageway is clear or blocked.

If, as was claimed above, the Fed´s auxiliary gold vault is situated in the Chase Manhattan Plaza vault facility, or is even part of the Chase vault, then the door of  this auxiliary vault would be similar to the vaults doors of the Chase Plaza vault.

As explained below, Andrew Tobias’s description of a 30 tonne door that swings open and shut sounds very similar to the doors of the Chase / JP Morgan vault across the road at 1 Chase Manhattan Plaza, level B5. These vault doors were built by Mosler.

A number of newspaper articles from 1960 and 1961 provide additional perspective on the Chase Manhattan Plaza vault doors, with slightly differing door details.

This newspaper article from July 1961 says that there are actually 6 doors to this cavernous Chase vault:

On the lowest level, ninety feet below the street, is the world’s largest bank vault, 350 feet wide and 100 feet long. The vault has six massive doors, each twenty inches thick, which weigh a total of 250 tonnes.

This New York Times article from May 1960 states that:

The Chase-Manhattan bank building is on a two-block site bounded by Nassau, William, Liberty and Pine. 8th May 1960.

With delivery last week, of six doors weighing an average of forty-five tons each, a bank vault that will be the world’s largest is rapidly nearing completion.”

The vault weighing 985 tonnes and occupies 35,000 square feet of floor space.”

newspaper article from August 1961 confirms the above vault details, and includes a description of the vault doors being able to be opened and closed with one finger, which is uncannily like Andrew Tobias description.

The new skyscraper bank just finished here naturally has the world’s largest bank vault, I found on peeking in. its length is 350 feet and width 100 feet, with the height being over 8 feet. Concrete walls seven feet thick encase it and the whole thing weighs about a thousand tons.

Although these stainless steel doors weigh 45 tons each, they can be opened or closed with one finger, I was told.

Recall Tobias´s phrase of “so precisely balanced that I was able to swing it open and shut.”

A photo of one of the six doors of the vault under 1 Chase Manhattan Plaza can be seen here in this old Mosler advert. See photo 7. Notice how the door is of the standard rectangular swinging variety.

The vault doors at Chase Plaza  are said to be Mosler Century  doors, some weighing 45 tons and 20 inches thick and also some 35 tonnes doors. If 4 of the 6 doors each weighed 45 tons, and the remaining 2 doors weigh 35 tons each, that would give a total weight of 250 tons, as quoted above.

These vault doors were also featured in a reference to the November 1961 issue of Mosler’s newsletter “Mosler Messenger”, as mentioned here. Why there would need to be 6 separate doors to the Chase Plaza bank vault is not clear. Perhaps there are 6 different sections to the vault, each with a distinct entrance door.

Unfortunately, there is little or no information in the public domain about the Chase Plaza vault, despite the fact that there apparently used to be tours of the Chase Plaza building (and vault areas) back in the 1960s.

Corner of Liberty Nassau at Fed

Structure of the main vault

To appreciate possible construction approaches to the Fed’s auxiliary vault in the early 1960s, and why it would have made sense at the time to leverage the nearby Chase Plaza vault area, it’s worth examining the structure of the FRBNY’s main vault and how it was constructed.

It’s possible that an auxiliary vault could have been built in the early 1960s within the Fed´s existing level E basement by, for example, converting an existing storage room or similar into a reinforced vault room. Whether such a suitable available space would have been adjacent the main vault is unclear.

However, if space constraints dictated the need for further excavations beyond the perimeter of the building at basement level E, then evidence suggests that creating this space would be most practical by excavating south near the corner of Nassau Street and Liberty. The fact that, luckily enough, there were already excavations being done south of Liberty in 1958-1960, makes it entirely logical that the New York Fed piggybacked on the Chase Manhattan vault project.

The main gold vault lies at the bottom of the FRBNY’s, 5 basement level, headquarters in Manhattan. The building is bordered by four streets, namely, Maiden Lane, William St, Liberty, and Nassau St. For ease of explanation, (but simplified slightly) Maiden Lane is roughly to the north of the building, William St to the east, Liberty to the south, and Nassau St to the west.

The main gold vault is actually the bottom level of a three-tier vault structure known as basement levels C, D and E. This three-tier vault was lowered into an excavation that had been dug down to the Manhattan bedrock.

The vault sits within this excavation or ‘hull’, with a corridor running all the way around between the vault and the outer walls of the hull. The walls of the vault, as well as the walls of the corridor are lined with reinforced concrete. Hence the main vault has been, at times, described as a double-vault.

In a section about the HQ building, the Fed’s current website has a few references to the main vault as a “triple-tiered vault system” with a “nine-foot door and door frame (weighing 90 and 140-tons, respectively)” that was “lowered to the bedrock foundation”. Notably, the ‘About the Building’ web page says nothing about the auxiliary vault.

The perimeter of the FRBNY HQ is a trapezoid with the west side wider than the east side, i.e. the length of the perimeter adjacent to Nassau St is a lot longer than the perimeter adjacent to William St.

FRBNY basement A plan and layout

Floor plans of some of the higher basement levels of the FRBNY HQ are viewable on Cryptome.org here, and were sourced from  the Avery Library at Columbia University. You can see the blueprints of Basement A here. Notice that the largest open type space of the basement (with what looks like pillars) is to the west of the building, running north to south.

Staircases and elevators etc are positioned more in the centre, or core, of the building. A narrower open space seems to run west to east parallel to liberty. Thick external walls (and possibly corridors) seem to be indicated around the entire plan and also within the plan one third the way to the left. Although this is said to be Basement A, this drawing would be in keeping with the description of the lower basement levels:

The main vault is described in some detail in the Fed´s older educational material:

The gold is secured in a most unusual vault, an impressive chamber nearly half the length of a football field”. KTTGV 1991

The gold vault is actually the bottom floor of a three story bunker of vaults arranged like strongboxes stacked on top of one another. The massive walls surrounding the vault are made of reinforced structural concrete” KTTGV 1991

The vault’s interior, encased by steel-and-concrete walls several yards thick, resembles a cell block with 122 triple-locked storehouse compartments.” A Day at the Fed 1997

Additional details of the main gold vault structure can be gleaned from old newspaper coverage, including the corridor running all the way around:

A four-foot corridor surrounds the vault itself and at each turn a mirror is arranged so that a guard standing before the vault may look all the way around it without moving.Newspaper article 1925

Completely around this double gold-vault ran a narrow alleyway, with mirrors set at the corners, so that a guard standing at any one point could see the entire circuit. The outer face of this passageway was a concrete wall, set in the foundation rock.” Newspaper article 1931

The vault below has three floors: bar gold and coins on the bottom, currency on the second, securities on the third.” New Yorker, September 1931


The construction of the main vault faced a number of construction challenges, but you have to go right back to 1921 when it was still being constructed to grasp what these challenges were. Additional information from 1930 provides some more background.

During the FRBNY HQ foundation excavation, the bedrock of Manhattan first appeared at a depth of 87 feet at the corner of Nassau and Liberty streets (south-west). The presence of this bedrock meant that the gold vault couldn’t be much lower than about 80-85 feet below street level (curb), even though the rock undulated lower over other parts of the site.

Because it’s so far down, there was also the problem of the water table to deal with, especially in an area (Manhattan) surrounded by rivers. The water issue was most problematic on the three sides away from the Nassau/Liberty corner.

Page 41 of the FRBNY 1921 Annual Report states that:

The rock underlying the site has proved to have an undulating surface. At the corner of Liberty and Nassau streets it is 87 feet below the curb. At other parts of the site it is as much as 117.3 feet below this same curb. Owing to this condition, to the varying kinds of foundations which support the adjacent buildings, and to the depth of the excavation, the construction of the foundation is considered to be one of the most difficult and exacting pieces of foundation engineering ever undertaken.

Page 40 of the same FRBNY annual report states:

The vault is a three story structure with its lowest floor 80 feet below the curb at Liberty and Nassau streets. The entire vault is below tidewater level.” 

A 1930 edition of Popular Mechanics expands on the water issue while constructing the main vault:

eighty-five feet below high curb line of the street and fifty-six feet below ground water level. On one side of what used to be a hole there is a piece of the solid rock of Manhattan. The other three sides are held against the pressure of underground water from the East and North rivers by walls of iron rods and concrete, ten feet thick, even stronger than the natural rock.

This is the hull of the bank’s vault, a massive vessel, five stories deep, protected on three sides by a terrific pressure of muck and water. Within that buried hull is the vault itself, a structure of three levels contained within walls of steelcrete – a combination of metal and concrete – a construction developed particularly to protect the treasure of the federal reserve banks.

(The World’s Greatest Treasure Cave”, Popular Mechanics, January 1930, Volume 50, Number 1, by Boyden Sparks)

With such treacherous and water problem surroundings, especially in the surroundings away from the corner of Nassau and Liberty, any extension of space in those directions would be challenging. The easier option would be to excavate or extend to the south from the area near the Nassau / Liberty corner.

With the Chase vault being built to the south under Liberty, the only construction work to do from the Fed side would be the construction of a link corridor or tunnel to connect the two facilities.

The effort and cost put in by the Fed in the 1920s in researching the structure and strength of the main vault should not be underestimated, as this somewhat humorous quotation demonstrates (1921 FRBNY Annual Report):

During 1920-21 the Federal Reserve Board conducted a series of tests of different types of vault construction by attacking them with explosives and other modern implements, at the conclusion of which this and other Federal Reserve Banks were enabled to add greatly to the strength of their vaults, and at the same time greatly to reduce their cost. It is believed that the vault of the Federal Reserve Bank of New York will be not only by far the strongest, but by far the cheapest for its size ever built.”

Presumably the Fed Board didn´t carry out these vault attacks themselves. In fact, Popular Mechanics suggests hat they outsourced this job:

the vault was built in accordance with the findings of a group of scientists of the bureau of standards, army engineers and architects. Previously there had been tests in which every known type of construction was subjected to attack with explosives, oxyacetylene torches that cut steel as a knife cuts cheese, and pneumatic hammers and chisels which are equally effective on concrete. As a result it was found that a fabric of concrete and steel formed an alliance which best resisted all these forms of attack.

On a more serious note, the above shows that the construction of a standalone auxiliary vault on Basement Level E by converting an existing space within the basement isn´t the simple task of putting a vault door on to a store room. The vault walls would also have to be built up and strengthened substantially.

Would it not be as easy to just burrow through a linked tunnel under Liberty, near the Nassau / Liberty corner and fit out a corridor to the environs of the Chase vault? In that case the aux vault would still be very near the main vault and at the same subterranean level, and substantial construction work in the tight space of the existing E level basement would be avoided.

One Chase Manhattan Plaza - the model

Why the Secrecy?

When JP Morgan’s 1 CMP B5 vault became a licensed depository of NYMEX/COMEX in 2011, COMEX’s owner, the CME Group, submitted to the CFTC a summary of requirements document as part of the vault application. This summary of requirements (for the JP Morgan vault to act as a licensed vault) took the form of two appendices (Appendix A and Appendix B). This would have included a vault inspection description and vault classification report.

As part of the application, the CME also requested confidential treatment of the vault details from the CFTC on the grounds that disclosure of Appendix A and/or Appendix B would reveal confidential commercial information of the submitters (NYMEX and COMEX) and of other persons.

The CME also requested that this confidential treatment continue “until further notice from the Exchanges”, and that if any Freedom of Information Act (FOIA) requests were received by the CFTC about the vault that the CFTC should notify the CME “immediately after receiving any FOIA request for said Appendix A, Appendix B or any other court order, subpoena or summons for same.

Unbelievably, the CME also requested that they “be notified in the event the Commission intends to disclose such Appendix A and/or Appendix B to Congress or to any other governmental agency.

So why would JP Morgan, as a commercial precious metals vault operator, be asking for an FOIA exemption when two other vault operators, namely Brinks and Scotia Mocatta, submitted vault licensing applications, here and here that did not see the need to ask for confidential treatment on the basis of “confidential commercial information”?

Looking at a list of possible FOIA exemptions, there is nothing in the list that would apply to JP Morgan but not to Scotia Mocatta and/or Brinks, except perhaps the first type of FOIA exemption in a scenario in which, were the aux vault at level B5 in the Chase Manhattan Plaza complex, then it could be included under foreign policy considerations i.e. “Those documents properly classified as secret in the interest of national defense or foreign policy”. i.e. that the Chase vault facility conducts business for a ´Federal´client and on behalf of foreign central banks and international monetary organisations.

In summary, there is a lot of circumstantial evidence to suggest that the Fed’s aux vault is indeed located at 1 Chase Manhattan Plaza, B5, accessible from the Fed’s Vault E via a link corridor or tunnel structure.

Until the FRBNY writes publicly about its auxiliary vault, which seems unlikely, then circumstantial evidence remains as the only evidence on which to go on.

The Keys to the Gold Vaults at the New York Fed – Part 1

Over time, the Federal Reserve Bank of New York (FRBNY) has become increasingly less transparent in sharing information about its Manhattan gold vaults. I use gold vaults in the plural because there are two gold vaults at the New York Fed’s headquarters, namely, the main vault and the auxiliary vault.

During the 1970s, New York Fed financial writer Charles Parnow wrote some informative and revealing material profiling the Fed’s Manhattan gold storage arrangements, however, the original text from these publications has been gradually rewritten, distilled, and watered down over time, and today hardly anything of substance about the Fed’s gold vaults makes it on to the New York Fed’s web site.

Luckily, most of this older information is still available from various on-line sources including a number of versions of an FRBNY publication titled ‘Key to the Gold Vault’, and another publication called ‘A Day at the Fed’. Old newspaper articles provide additional coverage.

Although most of the information in the Fed’s brochures has been covered elsewhere and is fairly well-known, there are a number of important and mostly forgotten facts from the early editions of these brochures which I think make an analysis of this material worthwhile. These facts centre on the following:

a) The FRBNY’s Auxiliary vault and its probable location

b) The arrival of low-grade Coin Bars at the FRB in New York in 1968

c) The substantial withdrawals of gold from New York from 1991 to the present day

d) The noticeable decline since the late 1970s in the number of central banks with gold holdings at the FRBNY

Entering the Main Vault - FRBNY

Chink of Light?

In October 2010 the Financial Times touched upon a small part of the FRBNY’s gold operations in an article titled ‘Chink of light shed on New York Fed gold’. The article, written by the FT’s Jack Farchy, reported that the FRBNY had revised down from 60 to 36 the number of foreign central bank customers that it claimed to hold gold on behalf of.

According to the FT, this change shed “a rare chink of light on the opaque activities of central banks in the gold market.”

The New York Fed was prompted to explain its gold customer revision after the FT had asked the FRB why a 2004 version of its ‘Key to the Gold Vault’ brochure claimed to hold gold for 60 foreign central banks while the 2008 version of the same publication cited the figure of 36 central banks.

The Fed’s explanation to the FT was that “the revision was the result of a change in the way it counts the countries that use its services to store gold” and that “its previous claim of approximately 60 countries referred to the number of foreign central banks with accounts at the NY Fed, including those that did not hold any gold.

From 60 to 36 gold customers?

However, as we shall see below, the 2004 publication (and a 1998 version) explicitly referred to “Bullion at the Federal Reserve Bank of New York belonging to some 60 foreign central banks and international monetary organizations”, so this Fed explanation to the FT contradicts what it actually stated in its own publications in 2004 and 1998.

Adding to the confusion, the Fed spokesperson also told the FT (in 2010) that “there has been no change in the number of accounts with active gold holdings in recent years.”

Since gold at the Fed is supposed to be held solely under earmark via distinct bar holdings and weight lists (i.e. not fungible), it’s unclear as to what the Fed meant by ‘active gold holdings’.

The Financial Times also pointed out that after they had contacted the NY Fed in October 2010, “the central bank removed the old (2004) brochure (pdf) from its website.”

The Fed seems to have a penchant for removing gold information from its web site, because in late 2012, the 2008 version of the ‘Key to the Gold Vault’, which used to be here, was also removed from the NY Fed web site, and replaced by the FRBNY’s current rather sketchy gold vault information offering which can be found on its web site here. Interestingly, late 2012 was when the Deutsche Bundesbank first announced that it planned to repatriate some of its gold holdings from the New York Fed.

The current gold information on the FRB´s website merely consists of a spartan one page summary of text from previous versions of the ‘Key to the Gold Vault’, but in my view, most of the important information has been omitted.

Weighing US Assay Office bars - FRBNY


While the FT thought that the two ‘Key to the Gold Vault’ brochures, dated 2004 and 2008, were “the only known information about the vault”, this is not the case. In total I sourced four versions of this document on the web in addition to a lot of other relevant information.

Both the 2008 and 2004 versions of the ‘Key to the Gold Vault’, as well as a 1998 version, are available to download from old imprints of the Fed’s web site using the Internet Archive (or WayBack Machine). There is also a 1991 version of the document available elsewhere on the web.

The 1991 version contains far more details about the New York gold than the subsequent versions in 1998, 2004 and 2008, and reading through the versions, you can see that nearly everything in the later editions seems to have been replicated from the 1991 version.

You can see all four on-line versions as follows:

Key to the Gold Vault, 2008 version

Key to the Gold Vault, 2004 version

Key to the Gold Vault, 1998 version

Key to the Gold Vault, 1991 version

A limited extract from the 1991 version of ‘Key to the Gold Vault’ is also featured on the Minneapolis Fed web site, here.

There is also another revealing FRBNY publication called ‘A Day at the Fed’ which is relevant to the Fed’s gold vaults. Unfortunately, the ‘A Day at the Fed’ document does not appear to be available on-line any longer and is not accessible via the Wayback Machine. There is a copy of the ‘A Day at the Fed’ uploaded here – A Day at the Fed – Charles Parnow.

Charles Parnow

The 1991 version of ‘Key to the Gold Vault’ was itself based on far earlier versions of the brochure going all the way back to 1973, so some of these forgotten details about the gold go back over 40 years, to an era in which the NY Fed seemed to be, for whatever reason, less secretive.

According to Worldcat, the global library cataloging web site, the ‘Key to the Gold Vault’ was originally authored by Charles J Parnow, with the first edition published by the FRBNY in 1973. Additionally, the ‘A Day at the Fed’ booklet was also authored by Charles Parnow in 1973. Many of the subsequent versions of these documents just appear to have been reprints and reissues, with small rewrites, and then gradually, large chunks of the material were edited out over time.

Both of these publications have also been widely drawn on by journalists over the years when writing newspaper and on-line articles about the Fed’s New York gold vault(s).

Here are the various WorldCat entries for ‘Key to the Gold Vault’ and the ‘A Day at the Fed’

“Key to the Gold Vault” Author C J Parnow, Publisher: Federal Reserve Bank of New York, Public Information Dept: 1974 and 1976

“Key to the Gold Vault”: Federal Reserve Bank of New York: 1973, 1989, 1991, 1998, 2006

“A Day at the Fed”: 1973, 1974, 1977, 1980, 1983

“A Day at the Fed” 1991

The version of ‘A Day at the Fed’ that I found is from 1997 (by Charles Parnow), but this appears to be just a reprint of an earlier version.

So who was Charles Parnow? From his obituary in 2010:

After graduating from NYU with a B.S. degree in journalism and finance, Mr. Parnow’s career in writing began as a financial writer for United Press International (UPI). He subsequently held positions at the Federal Reserve Bank of New York where he composed print and multimedia educational material for both adults and children, and was the editor of the company magazine. Before retiring Charles was a senior writer of public information for the New York Stock Exchange. Mr. Parnow was a member of the New York Financial Writer’s Association and the Overseas Press Club.”

Charles Parnow was therefore an insider at the New York Fed and everything that he wrote for publication would have been well researched and based on fact. Parnow also appears to have been a well-regarded author on financial matters, and is probably familiar to financially savvy New Yorkers of a certain age. His accomplished writing style comes across while reading the earlier versions of the Fed material.

It’s unclear as to what input if any Parnow would have had after writing the original versions of the publications in the early 1970s. Its also unclear how long Parnow stayed working at the FRB. It would appear that other Fed media staff just re-edited his publications over the years as they saw fit.

NY Federal Reserve Gold

Central banks pull back their holdings back from the NY Fed

While the 1991 version to the key to gold vault does not state the number of central bank customers that the FRB holds gold on behalf of, the 1998, 2004 and 2008 versions do, as follows:

Bullion at the Federal Reserve Bank of New York — the world’s largest repository of gold — belongs to some 60 foreign central banks and international monetary organizations.” (page 5, 1998)

Bullion at the Federal Reserve Bank of New York belonging to some 60 foreign central banks and international monetary organizations is stored in 122 separate compartments in the main and auxiliary vaults.” (page 5, 2004)

Bullion at the Federal Reserve Bank of New York belonging to some 36 foreign governments, central banks and official international organizations is stored in 122 separate compartments in the main and auxiliary vaults.” (page 5, 2008)

Notice the reference to the Auxiliary vault in the 2004 and 2008 statements but not the 1998 version.

International Monetary Organizations or Official International Organizations just refers to institutions such as the International Monetary Fund (IMF) and the Bank for International Settlements (BIS).

As you can see from above, the phrase ‘bullion….belonging to some 60 foreign central banks” can’t really have more than one meaning, so the FRBNY’s explanation to the FT in 2010 about the sharp drop in the number of gold customers between 2004 and 2008 makes little sense, i.e. that the “previous claim of approximately 60 countries referred to the number of foreign central banks with accounts at the NY Fed, including those that did not hold any gold”,

The Fed’s explanation makes absolutely no sense at all in light of the fact that this 60 customer figure of gold holders was also quoted by the Fed in 1998, six years prior to 2004, and has been quoted extensively by newspapers and other media from 2004 onwards without the Fed attempting to correct or clarify the total.

For example, in January 2005, in an article about a rare 1933 double eagle $20 gold piece being stored at the FRB’s main gold vault, the New York Times wrote:

Until last week, the world’s most expensive coin was hidden in the world’s most valuable gold vault. That is to say, in the brilliantly lighted blue-and-white stronghold of E Level, the deepest sanctuary of the Federal Reserve Bank of New York, the city’s bank of banks.
The coin was locked in a compartment at bedrock, 80 feet below Liberty Street in Lower Manhattan, surrounded by $90 billion worth of gold bars — some 550,000 of them — from 60 foreign institutions.

In November 2006, the American Museum of Natural History wrote on its web site:

The Federal Reserve Bank of New York holds the world’s largest accumulation of monetary gold. Only a small portion belongs to the U.S. government. The bank serves as guardian for it, as well as the gold monetary reserves of approximately 60 foreign governments, central banks and international organizations.”

Perhaps the 2004 reference to 60 foreign central banks was copied from the 1998 version of Key to the Gold Vault. In that case, the 60 gold customer total would have been correct as of 1998 but not in 2004.

This would suggest that the large decline in central bank customer gold holders took place prior to 2004, some of it most likely due to gold being withdraw for central bank sales and leasing activities, and some possibly after the September 11, 2001 Trade Center destruction, which would certainly have made foreign central banks more reluctant to hold gold in down town Manhattan vaults.

So, we can conclude that at least 24 central banks ceased to have gold holdings at the NY Fed between the late 1990s and 2008.

If you go back even further and search on-line newspaper archives, there are also some references in the 1970s to the number of central banks that stored gold at the New York Fed.

For example, this October 1978 article states that “about 85 individual countries are represented” as gold customers of the FRBNY. You may notice that most of the text in this newspaper article was taken directly from one of the ‘Key to the Gold Vault’ brochures:

A March 1973 article stated that “the (gold) owners are spread among 70 foreign central banks, government agencies, and international monetary agencies”.

This December 1960 article states “the bank stores for free the gold of 72 foreign governments, central banks, and international agencies.” It also says there were 96 cages (not 122 cages), some of which were sub-divided into smaller units.

This July 1963 article also mentions 96 compartments (not 122) and holdings of a massive 13,000 tonnes:

13,000 tonnes in the vault on level E, with 960,000 bars stored in 96 compartments and owned by 70 foreign governments.

So, from about 70 countries in the 1960s and early 1970s, the number of countries holding gold at the Fed seems to have peaked at around 85 in the late 1970s before dropping to a range near 60 in the 1990s, and then 36 in 2008. Notice the huge decline of ~50 gold account holders between 1978 and 2008.

The rise customer numbers in 1978 was no doubt partially due to some central banks opening up gold accounts at the Fed in order to receive restituted gold from the IMF during the gold restitutions around that time.

Remembering that the US Treasury also holds about 5% of its supposed gold reserves at the FRBNY, then, as of 2008 there were 36 foreign central banks and the US Treasury (i.e. 37 institutions) holding gold reserves at the FRBNY.

Surprisingly, the US Treasury in its gold custodial inventory of gold held at the FRBNY lists claims that it holds 31,204 bars in 11 compartments, but the schedule lists these 11 compartments as letters from A to K, and not numbers as are written on the compartments/cages in the FRBNY main vault.

The US Treasury gold supposedly stored at the FRBNY is listed here, starting on page 132 of the pdf (or page 128 of file).

FRBNY desk reflection

Millions of Ozs in the Vaults

Since the early 1970s there has been a consistent drop in the amount of gold held by foreign account holders at the NY fed. Some quotes follow:

(The vault) contained approximately 315 million troy ounces of gold early in 1991, comprising approximately 28 percent of the world’s official monetary gold reserves.” (Introduction, Key to the Gold Vault (KTTGV) 1991)

In 1997, the New York Fed held about 275 million troy ounces of gold, or 8,600 tons, worth approximately $12 billion at the official U.S. Government price ($42.22 per fine troy ounce)” (A Day at the Fed 1997)

“In the middle of 1997, the Fed’s vault contained roughly 269 million troy ounces of gold.” (page 6, KTTGV 1998).

In mid – 2004, the Fed’s vault contained roughly 266 (226) million troy ounces of gold”. (page 6, 2004 KTTGV)

Note:The 266 million ounces was a typo in the 2004 brochure, and they meant to write 226 million ounces because they quoted a valuation of $90 billion based on a price of $400 per ounce. See explanation below.

As of early 2008, the Fed’s vault contained roughly 216 million troy ounces of gold.” (page 6, KTGV 2008).

As of 2012, the vault housed approximately 530,000 gold bars, with a combined weight of approximately 6,700 tonsCurrent NY Fed gold page on web site. This would be 212 million troy ounces if all the bars were 400oz good delivery bars (of 995 fineness or above).

Note: The NY Fed also used their 2010 update to the Financial Times to state that whereas their 2004 brochure claimed that they held 266 million ounces of gold on behalf of central bank customers, this should in fact have said 226 million ounces. This discrepancy is definitely just a typo since the same sentence in the brochure quoted a total gold holding value of $90 billion at $400 per ounce, which equates to 225 million ounces..

So, gold holdings at the FRBNY fell from 316 million ounces in 1991, to between 269 – 275 million in 1998, to 226 million in 2004, and 216 million in 2008, and 212 million in the last few years. That’s a 100 million ounce drop from 1991 to 2008 , or 3110 tonnes.

That this 100 million ounce outflow of gold from the Fed´s New York vaults took place in conjunction with a marked decline in the number of foreign central bank gold account holders at the Fed, suggests that some of the customers withdrew all of their New York gold holdings and ceased to be gold customers.

Part 2 of The Keys to the Gold Vaults at the New York Fed will focus on the FRB´s rarely talked about Auxiliary Vault, while Part 3 will shed some light on ‘coin bars’ and look at why coin bars arrived at the Fed’s Manhattan vaults, and where they might have gone since then.