Hong Kong recalls gold reserves from London, opens gold repository at Chek Lap Kok airport

Hong Kong is pulling all its physical gold holdings from depositories in London, transferring them to a high-security depository newly built at the city's airport. The 3,660-square-foot depository at Hong Kong's main Chek Lap Kok Airport will serve as a "storage facility for local and overseas government institutions". The facility would support Hong Kong's emergence as a Swiss-style trading hub for bullion and would lessen London's status as a key settlement-and-storage center.

The Hong Kong Monetary Authority will transfer its gold reserves stored in other vaults to the depository later this year. The monetary authority reported $63 million in physical gold reserves as of July 31. The Hong Kong Mercantile Exchange had signed an agreement to use the depository for its physical settlement and storage needs. Efforts will also be made to reach out to commodity exchanges, banks, refiners and precious metals and gold ETF providers.

- A smart and timely move by the Hong Kong authorities. Talk on the street in recent weeks has been rather critical of certain gold custodians, the uncertainty of having gold reserves stored with distant third parties and so on. And now with gold prices moving up again towards the critical $1000 level, it looks like government authorities, central banks, fund managers and some individual investors are starting to take action to secure their gold holdings.

(2009-09-04 07:04:11 SGT) [Biz] Permalink Comments [1]

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