JP Morgan Gold Vault London

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Introduction

JP Morgan owns and operates one of the two large commercial gold vaults in central London, the other one being the HSBC vault. Along with the Bank of England vaults, JP Morgan and HSBC make up the three largest gold vaults in London. In total, JP Morgan is one of 8 custodians offering precious metals vaulting facilities to the London Gold Market, the other 7 being the Bank of England, HSBC, Barclays, Brinks, Loomis, Malca Amit and G4S^[1]. JP Morgan is also one of 5 banks in London that are members of London Precious Metals Clearing Limited (LPMCL)^[2], the private company which has a monopoly on gold and silver clearing services in the London Gold and Silver Markets.

On its website, the London Bullion Market Association (LBMA) publishes a list of custodians^[3] offering precious metals vaulting services in the London market. For JP Morgan, the address listed by the LBMA is “JP Morgan Chase, 25 Bank Street, Canary Wharf, London E14 5JP”. However, this is not the location of JP Morgan’s precious metals vault in London. The location of the vault is not in Canary Wharf, but in the City of London, near Middle Temple, and between Fleet Street and Victoria Embankment.

JP Morgan Profile

JP Morgan Chase & Co is the largest bank in the US and operates as an investment bank as well as a commercial bank. The group has a huge international presence, and JP Morgan has been involved in the gold market in New York and London for many years. The parent entity JP Morgan Chase & Co, headquartered in New York, was formed via the 2004 merger of JP Morgan & Co and The Chase Manhattan Corp, therefore the group contains the legacy of some of the US’s most powerful banking entities such as the Morgans, the Rockefellers etc. In London, JP Morgan was one of the founding members of the London Bullion Market Association in 1987 through its Morgan Guaranty Trust Company of New York entity^[4].

JP Morgan Vault Location

JP Morgan’s precious metals vault in London is a subterranean vault located in a deep basement under a JP Morgan building on John Carpenter Street, in the City of London, and very near the River Thames. In fact, the deep basement is an L-shaped structure positioned under 2 buildings, one of which is on adjacent Carmelite Street, Additionally, the actual drive-in entrance to the basement and vault is through a secure gated entrance located on Carmelite Street. Carmelite is a continuation of Whitefriar Street. Inside the entrance gate to the left, a vehicle ramp slopes downwards.

JP Morgan’s John Carpenter Street building is bordered by Tudor Street, John Carpenter Street, and Victoria Embankment. This building is used by JP Morgan Asset Management. The second building (housing the basement entrance) is an anonymous looking building bordered by Carmelite Street, Tallis Street, John Carpenter Street, and Tudor Street. The John Carpenter Street building is connected to 60 Victoria Embankment, a listed building also owned by JP Morgan which has a ‘Great Hall’ events area that was recently renovated. Therefore, the vault address has on occasion been referred to as 60 Victoria Embankment, such as in this gold transaction confirmation statement issued by the Perth Mint – JP Morgan 60 Victoria Embankment. The address of the vault was also confirmed in a November 2009 article in UAE newspaper ‘The National”, which discussed “vaults of Standard Bank of South Africa, located in the London offices of JPMorgan Chase at 60 Victoria Embankment, Blackfriars, London.“^[5]. Standard Bank would have been using vault space within this JP Morgan vault.

Morgan Guaranty Trust Company of New York (the JP Morgan entity) originally took occupancy of 60 Victoria Embankment (the John Carpenter Street building) in 1991, and leased the building until December 2010, at which point JP Morgan purchased the John Carpenter Street building^[6], possibly because of the fact that the gold vault is in the building’s basement and JP Morgan wanted ownership and not just tenancy. JP Morgan’s leas on 60 Victoria Embankment was due to expire in early 2016, so this may have expedited the purchase^[7].

The location of JP Morgan’s London gold vault was first publicised on website ZeroHedge in February 2013^[8]. That posting allowed readers to contribute useful source information about the vault, such as the fact that the construction of the basement had been profiled in an academic paper in 1992 called “Prediction and performance of ground response due to construction of a deep basement at 60 Victoria Embankment”^[9].

This paper also includes a useful map showing the L-shaped layout of the basement, the fact that it is underneath two buildings, and the fact that it runs under John Carpenter Street. In the paper, the smaller area to the north-west was referred to as the “Island site”, while the bigger site running north-south to the east of the Island site was referred to as the “Main” site. Click on below image of map to view larger version of image.

The introductory page to this 1992 paper is also highlighted below, and it states.

“A 19m deep excavation for a complex L-shaped basement was carried out using top-down construction techniques at a city site in London”.

“The development required the construction of a 19m deep basement on a complex river side site whilst retaining an existing listed building and facades, with the basement passing under one of the latter”.

Click image to view larger version.

The existence of the JP Morgan vault at the 60 Victoria Embankment location is also confirmed in a LinkedIn profile of a person who was working on system upgrades in the building between 2009-2010^[10]. The relevant text can be seen below. Click image to view larger version.

 

Gold Holdings at the JP Morgan London vault

Four relatively large exchange traded fund groups hold a substantial amount of gold and other precious metals at the JP Morgan vault in London.

The iShares Gold Trust (IAU) operated by Blackrock is a physically backed gold Exchange Traded Fund (ETF). JP Morgan has been the custodian of IAU since the second half of 2010. IAU holds its gold in 3 vaults in 3 different countries, namely the JP Morgan vault in London, the JP Morgan vault in New York, and the Scotia Mocatta vault in Toronto, Canada. A gold bar inspection letter of the iShares Gold Trust dated December 2015 states that the JP Morgan London vault held 7011 Good Delivery gold bars on behalf of the trust at that time^[11].

Given the large investment inflows into gold ETFs during the first quarter of 2016, the iShares Gold Trust was storing 9,355 Good Delivery gold bars (117 tonnes) at JP Morgan’s London vault as of 11 April 2016. The IAU gold bar list, which can change daily, can be viewed on the iShares website^[12].

Deutsche Bank operates 5 physically backed Exchange Traded Commodities (ETCs) that hold gold at the JP Morgan vault in London. These ETCs are the db Physical Gold ETC, db Physical Gold ETC (EUR), db Physical Gold Euro Hedged ETC, db Physical Gold GBP Hedged ETC^[13], and db Physical Gold CHF Hedged ETC^[14]. In total, these ETCs held 2,423,590 ounces of gold (75.4 tonnes) as of 11 April 2016.

The “Source Physical Gold P-ETC”^[15] is a physically-backed ETC that uses JP Morgan London as custodian. As of early April 2016, this ETC held 2,366,000 ounces of gold (73.6 tonnes) at the JP Morgan vault in London.

ETF Securities (ETFS) operates 4 precious metals trusts that hold some or all of their metal at the JP Morgan vault in London^[16]. As of 11 April 2016, the ETFS Palladium Trust held 183,000 ozs of palladium bars at the London vault, while the ETFS Platinum Trust held 457,000 ozs of platinum bars at the London vault. (Note, these Trusts also hold platinum and palladium at a UBS vault in Zurich). The “ETFS Physical Precious Metals Basket Shares” hold gold, silver, platinum and palladium at the JP Morgan London vault 90,180 ozs gold (226 Good Delivery gold bars) silver 3.3 million ozs  11,600 ozs platinum, 17,500 ozs palladium^[17]. The “ETFS Physical White Metal Basket Shares” also holds relatively small numbers of platinum and palladium bars at the JP Morgan vault in London.

References and Links

1.^ London Bullion Market Association (LBMA) precious metals vaulting http://www.lbma.org.uk/vaulting

2.^ London Precious Metals Clearing Limited (LPMCL) http://www.lpmcl.com/

3.^ LBMA list of custodians offering precious metals vaulting services in London http://www.lbma.org.uk/assets/market/gdl/Custodians_London.pdf

4.^ LBMA Memorandum and Articles of Association, 2009 edition: http://www.lbma.org.uk/assets/Memorandum%20and%20Articles%2020090611.pdf

5.^ “Mystery gold cargo linked to Saad, Gosaibi feud”, The National newspaper, United Arab Emirates http://www.thenational.ae/business/banking/mystery-gold-cargo-linked-to-saad-gosaibi-feud

6.^ “JPMorgan buys London headquarters”, Bloomberg, December 2010 http://www.bloomberg.com/news/articles/2010-12-20/jpmorgan-to-acquire-lehman-s-former-london-office-as-european-headquarters

7.^ “JP Morgan to remain in London despite speculation it may quit UK”, The Guardian, August 2010 http://www.theguardian.com/business/2010/aug/09/jp-morgan-to-remain-in-london

8.^ “Is This Where The Secret JP Morgan London Gold Vault Is Located?”, Zerohedge.com 16 February 2013″ http://www.zerohedge.com/news/2013-02-16/where-secret-jp-morgan-london-gold-vault-located

9.^ “Prediction and performance of ground response due to construction of a deep basement at 60 Victoria Embankment in “Predictive soil mechanics: Proceedings of the Wroth Memorial Symposium held at St Catherine’s College, Oxford, 27-29 July 1992” http://www.icevirtuallibrary.com/doi/book/10.1680/psm.19164

10.^ LinkedIn profile confirming vault at JP Morgan, 60 Victoria Embankment, City of London https://www.linkedin.com/in/iain-ames-b50b2127

11.^ iShares Gold Trust (IAU) gold bar inspection letter, December 2015 http://www.ishares.com/us/literature/inspection-letters/iau-inspection-12.pdf

12.^ iShares Gold Trust (IAU) gold bar list https://ebts.jpmorgan.com/metalicsWebApp/ebts_downloads/BONY_IAU.pdf

13.^ Deutsche Bank, Precious Metals Exchange Traded Commodities, 4 ETCs https://etc.deutscheam.com/GBR/ENG/ETC/Productoverview?sectors=Precious+Metals

14.^  db Physical Gold CHF Hedged ETC https://etc.deutscheam.com/CHE/ENG/ETC/Details/DE000A1R4RS2

15.^  Source Physical Gold P-ETC http://www.sourceetf.com/sites/default/files/documents/SOURCE_SGLD_FACTSHEET_EN.pdf

16.^ ETF Securities precious metals Trusts holding metal at the JP Morgan London vault https://www.etfsecurities.com/institutional/us/en-us/products.aspx?filter=74

17.^ ETFS Physical Precious Metals Basket Shares, Bar Inspection report, 11 January 2016 https://www.etfsecurities.com/Documents/GLTR%20-%20Website.pdf