The highly-organised Easter weekend safety deposit boxes raid at a facility in Hatton Garden, London, demonstrates once again that holding tangible assets outside of the fragile banking system is a risky exercise, if the manner in which those assets are stored is not thoroughly secure and fully insured.
While many of those who stored valuables in the boxes were jewellers, reports are emerging of how some of the victims had their entire life savings, including cash and bullion, in boxes which they believed to be secure. Many had no insurance partly because they could not afford the extra cost and partly because they were convinced their property was secure in the Hatton Garden facility.
“The robbery was reported on Tuesday but by Friday we had still not been told whether our stuff had been taken,” said one jeweller who asked to remain anonymous. “I had £350,000 worth of cash and jewels and I was in a terrible state”.
“By Friday, some of us owners had had enough and each paid the staff at the building £100 to have a look at the list of boxes missing. Mine was fine but a friend had his life savings completely stolen, worth £500,000.”
There appears to have been a shocking lapse in security surrounding the Easter weekend heist. The security lapse reflects badly both on the company and on the police.
“On Friday it emerged the Met received a call on Good Friday and were told an intruder alarm had gone off – but decided it did not require a response. Officers are now investigating why the call was given a grade that meant no police response was deemed necessary,” according to the BBC.
An alarm was reported to police but no response was deemed necessary. Yesterday, this decision was described as ‘totally incompetent’ by ex-head of the Flying Squad, John O’Connor.
Local residents reported loud drilling over the weekend. “I heard drilling late on Thursday but thought it was workmen after we had a huge power cut. When I heard the news, I realised it was the gang drilling into the vault,” said John Han.
Further questions are being asked regarding the competence – or worse – of the Met over why CCTV footage was not released in the critical period following the discovery of the robbery which may have helped to identify the thieves who may have left the country by now.
The footage was released by the Mirror newspaper on Saturday. “The Met Police said it had already recovered the footage ‘at the earliest opportunity’, but declined to comment on why it was only released after being published by the newspaper,” adds the BBC.
For our clients, the how of owning gold is important as the why and the manner in which bullion is stored is as important a consideration as the necessity to own bullion.
The nature of bullion ownership and having insurance is absolutely vital.
We operate a system of bailment and as such customers’ precious metal investments are held in custody, directly in their name. Customers can view the contents of their storage account at any time by visiting the GoldCore website and reviewing the contents, bar numbers and location of their holdings in their account. Reconciliation between the internal GoldCore client holdings which can be seen online and with our storage partners is done on a daily basis.
Clients are able to review the assets under their subaccounts based on their unique subaccount number. Their assets are always fully insured through the storage providers.
GoldCore works with an independent audit company, Inspectorate International, who audits the assets held in GoldCore’s secure storage locations. This is done bi-annually and the results of this audit are shared with every customer that has assets in secure storage with GoldCore.
Every participant in the international bullion market requires adequate insuranceto cover loss, damage and indeed theft.
This applies to mining companies, refineries, mints, financial institutions, bullion transporters and storage specialists.
The insurance of precious metals vaults and storage depositories is predominantly underwritten by specialist risk underwriters operating through the international insurance market such as Lloyd’s of London.
Our clients’ bullion holdings are covered by ‘all risk’ insurance underwritten by specialist ‘specie’. This insurance agreement, which is governed by English law, covers precious metals and other valuables against physical loss, damage, theft or disappearance up to the value of $50 million for any one loss in any one location. The agreement can be viewed by GoldCore clients.
It is vital to ensure that your bullion provider and its storage partners have adequate insurance cover. With low cost bullion providers generally comes low levels and inadequate cover.
Diversification and owning bullion in the safest vaults in the world and in the safest jurisdictions in the world is key.
A safety deposit box in a facility in one’s own jurisdiction would play an important role in this type of diversification. It is important to have access to an allocation of one’s gold in the event of an international crisis causing a temporary disruption to access to an overseas vault or indeed capital controls or problems in the banking system and international payments system.
We believe, however, that such an allocation should always be insured and it should be just large enough to meet emergency requirements or an intended small-scale sale. The bulk of one’s bullion should be stored in highly secure specialised, professional bullion vaults.
We provide fully insured bullion storage service in the safest vaults in the safest jurisdictions in the world, such as those operated by Loomis International in Zurich(formerly Via Mat International) and Brink’s in Singapore.
The jurisdiction in which one stores larger allocations of gold is also important. London has seen a number of high profile jewellery and gold heists in recent years. This is somewhat understandable given the concentration of wealth in London but at the same time such events are virtually unheard of in other international financial hubs like Zurich or Singapore.
Allocating a small proportion of one’s wealth to physical gold is of vital importance in these days of geopolitical tension, desperate monetary experimentation by central banks and gargantuan unpayable global debt. At the same time, one needs to consider very carefully how one stores this gold.
The experience of many of the unfortunate safe deposit box holders at Hatton Gardens demonstrates that one cannot take security for granted. In the coming months and years, as the current monetary insanity comes to its logical conclusion, bullion will become a highly desirable target of both criminal elements and bankrupt governments.
Hence the need to own it in the safest ways possible.