London Serves as a Global Safe, Allowing Countries to Convert Gold into Cash Quickly

Thousands of tons of gold reserves from various countries are stored under the streets of London at the Bank of England, which maintains nine vaults with around 400,000 bars valued at over 200 billion pounds. The institution is one of the largest gold custodians globally and holds metal belonging to both the UK and other central banks.

The choice of London as a storage location is not merely historical; it's practical. Having gold where it's bought and sold can be more useful than storing it exclusively in national vaults. London remains the main international center for physical gold trading, concentrating an infrastructure of banks, vaults, transport companies, and clearing systems that allows transforming what appears to be an immobile reserve into a liquid asset almost instantly.

The Bank of England explains this advantage simply: when one client sells gold to another, the bar doesn't move physically. The name on the ownership record changes instead, avoiding international transportation costs, insurance complexities, and logistical operations that can be expensive.