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.


0Comments

DATA PROVIDERS

Copyright © 2013 Microsoft. All rights reserved.

Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.

Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. 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 SIX Financial Information.

Japanese stock price data provided by Nomura Research Institute Ltd.; quotes delayed 20 minutes. Canadian fund data provided by CANNEX Financial Exchanges Ltd.

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.

127
127 rated 1
269
269 rated 2
463
463 rated 3
586
586 rated 4
657
657 rated 5
616
616 rated 6
644
644 rated 7
431
431 rated 8
263
263 rated 9
138
138 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
COPConocoPhillips10
NWSNews Ord Shs Class B10
YHOOYahoo! Inc10
TJXTJX Companies Inc9
AMXAmerica Movil ADR Rep 20 Ord Shs Series L9
More

LATEST POSTS

Scary story: the 2013 market looks like 1987

All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.

Fidelity Brokerage Services, Member NYSE, SIPC. (c) 2011 FMR LLC. All rights reserved

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.