Bullion, the oldest reliable investment!

The demand for storage space in bullion vaults is rising.

You and I may not have to worry about finding vault space for hundreds of 400 ounce gold bars, but the growth in demand for secure storage for gold bullion is telling.

As gold prices rise, high-wealth individuals and fund management companies with funds backed by physical gold, are having a tough time finding space in vaults.

Ten years ago, when gold prices were low, fewer people and funds were buying gold, and the demand for space in secure vaults fell dramatically. As a result, several large vaults were closed. One of these, in New York, was later converted into a steak house.

Well, now the tables have turned. Demand for storage is soaring. JPMorgan Chase & Co. recently reopened an underground bullion vault in New York that had been closed for more than a decade. Other companies in the bullion storage business are also taking steps to find or create more space for their clients.

What does this have to do with individuals, buying small quantities of gold coins and bars? Nothing directly. Whether you store your gold in a bank’s safety deposit box, or keep it hidden at home, none of this will impact you.

But it is an indicator that the growth in gold prices seems set to continue, at least for a while.

It’s a good sign when the world’s big players are seen to be buying more and more bullion. In addition to indicating their own confidence in gold, these large-scale purchases also help to support the current price of gold.

Put simply, the creation of new bullion vaults is a sign that individuals are doing the right thing when they secure a part of their wealth in the form of gold coins and bars.

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