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When people move from ETF paper to real metal, they need vaults to keep it in
The Year the Rich Went Wild for Gold
By Leslie Hook
Financial Times, London
Thursday, August 27, 2026
Row upon row of gunmetal-grey boxes fill the floor-to-ceiling shelves of Sharps Pixley's underground vault, concealing the glittering treasure packed inside. The vault in London is so full that the gold dealership is hunting for a site for a new one, says Giles Maber, head of UK at the company.
It is part of a global race to build vaults for precious metals from Switzerland to Singapore. This is a problem the industry doesn't usually have -- after all, gold takes up very little space, and a vault can last for hundreds of years. But the blistering rally in the gold price, which has doubled in the last three years, and accompanying surge of demand from wealthy individuals who insist on holding their gold in physical bar form, have prompted a small rush of activity in the normally sleepy vaulting sector.
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At Swiss gold group MKS Pamp, chief commercial officer Omar Liess is looking to build a "substantial" vault specifically to cater to the group's richest clients, so they can visit their gold in an elegant setting that he compares to a five-star hotel. "When people are leaving $200 million or more with us, we want to make sure we have the right infrastructure in place for them," he says.
"We have seen a big rise in demand on this side in the past 12-18 months" for the group's "white glove" service, he adds. This is for clients storing a minimum of $50 million worth of bullion, who can -- and do -- visit their gold, which is stored inside dedicated cages. "They want it as a safety net," says Liess. "If for any reason the banking system collapses, at least they have this gold that is physically allocated and outside the banking system."
That sentiment is one of the factors that helped drive gold to a record price of $5,595 per troy ounce earlier this year, up 104%on 12 months before. Prices have cooled from the January peak but remain higher than a year ago. Heavy buying from central banks, fears about the future of the U.S. dollar, investor concerns about public debt, and geopolitical chaos have together created a frenzy of buying and selling gold unlike anything industry veterans have seen.
Within this cocktail of motives, the stealthy purchases of the wealthy and their fixation with owning physical gold bars have prompted big changes in the niche segment of the market dedicated to private storage.
"We have six vault locations, and every single one of them we have to expand right now," says Ludwig Karl, chief operating officer of Swiss Gold Safe, which provides bullion storage. It is not only about space -- the insurance limit, which can be up to $5 billion on a single vault, also creates the need for additional vaults, he explains.
In Switzerland, vault space is also becoming more constrained because many disused Second World War military bunkers -- which have since been a popular option for storing precious metals -- are being pressed back into service by the country's military, which is seeking to bolster its defences.
Maber, at Sharps Pixley, says its hunt for additional vault space has been prompted in part by growing participation from family offices and by clients switching from gold-backed exchange traded funds into physical bullion. It is not ETFs that clients want now, he says. It is bars, it is coins. ...
... For the remainder of the report:
https://www.ft.com/content/eca845f4-9b65-4e66-b73b-d9c9d2c77487?syn-25a6b1a6=1
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