Tags: swiss | gold | storage

Swiss Running Out Of Places to Store Gold

By Julie Crawshaw   |   Thursday, 23 Jul 2009 11:20 AM

The boom in gold buying is straining Swiss banks’ gold storage spaces, Swiss news Web site 20 Minuten Online reports.

In fact, one Swiss bank has had to relocate some of its stored silver bullion to another site to make room for gold, a problem it attributed to the success of its gold ETF.

Fears of hyperinflation, the economic downturn, and the success of gold index funds (ETFs), which are supported by physical gold, have combined to boost gold sales.

Gold storage makes high demands on security, making the gold holding task more difficult, but some banks are managing to make their storage systems more efficient.

Though the large U.S. SPDR Gold Trust has recently experienced a small decline in its gold holdings, the Swiss are seeing continuing growth in locally managed ETFs.

A recent report noted that Swiss Bank Julius Baer was still seeing a 3.3 percent growth in its gold ETF in the current week.

And even though the Swiss Central Bank has been selling gold via the Central Bank Gold Agreement, it still holds 38 percent of its foreign exchange reserves in the precious metal.

"Prices remain well supported above the $950 an ounce mark, largely on the back of the weaker dollar," Calyon metals analyst Robin Bhar told Reuters.

"It may be that outflows from things like the ETFs or the retail base are being offset by more buying of OTC- or futures-based (products)," Bhar said.

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The boom in gold buying is straining Swiss banks’ gold storage spaces, Swiss news Web site 20 Minuten Online reports.In fact, one Swiss bank has had to relocate some of its stored silver bullion to another site to make room for gold, a problem it attributed to the success...
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