Armoured trucks leave NYC ‘loaded with gold’

So many investors have turned to gold during the recession that the HSBC bank on New York’s Fifth Avenue cannot cope with the amount of bullion being kept in its vaults, according to a report in the Wall Street Journal today. As a result, fleets of armoured security trucks have been leaving Manhattan, loaded with gold bars and coins for safe-keeping elsewhere.

HSBC refused to comment to the WSJ about this reverse gold rush because of "security concerns". But sources have told the paper that owners of vaults and warehouses across the United States have had to jump to action after HSBC issued an edict that it wanted retail investors to remove their bullion to make space for big institutional customers.

"I have never seen any relocation like this," Jonathan Potts, managing director of FideliTrade, owner of the Delaware Depository warehouses in Wilmington, Delaware, told the WSJ.

The problem is that many customers who would once have traded in gold contracts now want to take hold of the precious metal physically, whether in bars or coins. And it's not something you keep under the mattress.

David Norris, executive vice president of GoldStar Trust Co., a Texas-based company which organises metal storage for its clients, told the WSJ that it was ordered by HSBC back in July to stop sending gold coins for storage.

After storing its clients’ gold at the Fifth Avenue vault for 15 years, GoldStar was now looking to get it stored at one of the Delaware depositories. Which is easier said than done, requiring something approaching a military operation.

The price of gold has gained 32 per cent this year – and hit $1164.30 an ounce on Monday. With thousands more 'gold bugs' piling in, HSBC can afford to be choosy about its clients - some might say high-handed. In a letter seen by the WSJ, the bank warned some clients that their bullion "will be returned to the address of record... at your expense," unless they issued clear instructions as to where it should be moved.