Don't store your gold here

Storage facilities are running out of room as demand for the metal rises. Some customers have been turned away.

By Kim Peterson Nov 24, 2009 12:52PM
© Stockbyte/SuperStockGold's fantastic rise in price this year is causing a different kind of gold rush in New York -- a rush out the door of vaults and other storage facilities.

Too many gold lovers are buying up the precious metal and then looking for a place to store it. You can't very well stick a gold bar under a mattress or into an old coffee can, you know.

Normally, people would turn to a place like HSBC, which owns one of the largest vaults around. But HSBC is giving its retail customers the boot to make room for higher-paying institutional customers, The Wall Street Journal reports.

So HSBC is sending its retail customers a message: Take your gold and get out.

But where to go? And how to get the gold there? That's the problem faced by many of HSBC's customers now. Some are hiring armored trucks to move gold coins and bars to vaults across the country.

"I have never seen any relocation like this," an executive at one depository company told the Journal.

The Journal article has some interesting details about moving and storing gold. The metal is sometimes shipped in plain boxes (as opposed to boxes that say "gold inside"?) and in trucks with several armed guards.

And gold vaults generally have 27-inch-thick steel-reinforced walls, according to the Journal. To get inside, you need to pass through a series of doors, with each one opening only after the previous door is locked.

Let's hope the article doesn't give gold thieves any ideas.

At any rate, the Journal reports that the demand for bars, coins and other types of physical gold is expected to soar 21% this year.

This could create some opportunities for new gold storage companies, but the problem is that storing gold really isn't that profitable. One major depository only charges $12 per month for a 100-ounce gold bar.


Tags: goldHSBC
0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

123
123 rated 1
273
273 rated 2
482
482 rated 3
661
661 rated 4
635
635 rated 5
639
639 rated 6
619
619 rated 7
489
489 rated 8
277
277 rated 9
166
166 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ATVIACTIVISION BLIZZARD Inc10
BIDUBAIDU Inc10
CTSHCOGNIZANT TECHNOLOGY SOLUTIONS10
LUVSOUTHWEST AIRLINES CO.10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.