Thousands of tons of the gold reserves of numerous countries are not physically located within their borders. An important part is stored under the streets of London, where the Bank of England maintains nine vaults with around 400,000 bars, valued at more than 200 billion pounds. The institution is currently one of the largest gold custodians on the planet and holds metal belonging to both the United Kingdom and other central banks and certain financial entities.
The choice of London is not simply a historical matter. For a central bank, having the gold where it is bought and sold can be much more useful than storing it exclusively in a national vault. London continues to be the main international center for the physical trading of the metal and concentrates an infrastructure of banks, vaults, transport companies, and clearing systems that allows transforming an apparently immobile reserve into an asset available for operation almost immediately.
The Bank of England itself explains it simply: when one of its clients sells gold to another, the bar normally doesn’t even move physically. What changes is the name of its owner in the bank's records. In this way, international transport, extraordinary insurance, and logistical operations that can be expensive and complex are avoided.
London is the great global gold market
The main advantage is called liquidity. London concentrates the largest wholesale market for physical gold in the world, and the London Bullion Market Association (LBMA) estimates that more than 8,000 tons of gold are stored in its vaults. The value traded daily can reach tens of billions of dollars, and the market operates 24 hours connecting Asian, European, and American sessions.
The World Gold Council estimates that the London over-the-counter market accounts for approximately 70% of the global notional trading volume of gold. Furthermore, London establishes one of the most widely used international price references, and its infrastructure is designed so that large bars can quickly pass from one owner to another.
This is precisely the reason why storing gold in London can be attractive for a central bank. If it needs to sell a portion of its reserves to obtain foreign currency, reorganize its portfolio, or carry out a specific financial operation, having the metal already deposited within the market avoids having to transport it beforehand from another country.
It is not simply “deposited gold”: each bar can still have an owner
When a central bank deposits its reserves at the Bank of England, it does not mean that it is lending them to the United Kingdom. The gold of its clients is kept under a system called allocated custody, which implies that the owner retains the title of specific identified bars within the vaults.
For this reason, that metal does not appear as property of the Bank of England on its balance sheet. The entity acts as a custodian, not as an owner. In fact, the bank itself points out that, despite storing hundreds of thousands of bars, it only directly owns two, kept for exhibition purposes in its museum.
The combination of identifiable ownership and an enormously liquid market allows reserves to maintain their function as a security asset while remaining available to be used if a monetary authority needs it.
The standard that allows selling a bar practically at any moment
Another fundamental element is the so-called London Good Delivery, the international standard used by a large part of the professional market. The bars that meet these specifications must comply with strict requirements for weight, purity, identification, and provenance and come from refineries recognized by the LBMA.
This prevents a buyer from having to analyze and certify each bar again before accepting a transaction. If the gold has remained within the recognized custody chain, the market accepts its characteristics as accredited.
The importance of the standard among central banks remains enormous. The 2026 gold reserves survey by the World Gold Council shows that 93% of the consulted central banks indicate London Good Delivery bars as their main format for holding physical gold, while 62% also consider them their preferred option for purchases.
The Bank of England remains the favorite place for central banks
The same survey shows to what extent London maintains its appeal. 57% of the participating central banks stated that they store at least part of their reserves at the Bank of England, making the British institution the most cited custody destination. 49% indicated that they also keep part of the metal within their own country.
The percentages are not exclusive because many central banks divide their reserves among different locations. A part may remain within the country as a strategic asset, while another is kept in London or other major financial centers to have immediate access to the market.
The Bank of England does not publish how much belongs to each State, a common policy in the management of official reserves. In addition to gold custody, the institution provides banking services to around 140 foreign central banks, reflecting the historical role that London maintains within the international financial system.
What a country gains by leaving part of the gold outside its borders
The most obvious advantage is being able to quickly convert gold into money. The metal is used by central banks precisely because it combines security, diversification, and liquidity. In times of need, it can be sold or used in various financial operations to obtain resources without relying exclusively on reserves denominated in dollars, euros, or other currencies.
The World Gold Council points out that gold can even be used in swap operations to achieve liquidity, in addition to serving as a manageable asset within the reserve portfolio.
There is also operational savings. Transporting dozens or hundreds of tons of gold requires extraordinary security measures, insurance, specialized logistics, and coordination among various authorities. When the bar is already stored in a recognized vault in London and is sold to another institution, the transaction can be completed by changing ownership without physically removing the metal from the building.
Why not keep all the gold within the country itself?
Maintaining national reserves also has obvious advantages. It grants a State direct physical control over a strategic asset and eliminates the risk of relying on judicial decisions, international restrictions, or political problems in another jurisdiction. That is why many central banks distribute their gold between abroad and their own vaults instead of concentrating it in a single location.
In fact, the trend seems to be moving towards greater diversification. In the World Gold Council's 2026 survey, 9% of central banks reported having increased domestic storage over the past year, while 10% diversified their reserves among more locations abroad. Looking ahead to the next twelve months, 7% planned to increase national custody and 9% to explore new international destinations.
The strategy, therefore, usually does not consist of choosing between London or the home country, but rather finding a balance between sovereignty and financial availability.
A bar of gold that does not move can change countries in seconds
This is the paradox that explains the role of London. Gold is often considered the quintessential physical asset, but one of the reasons central banks store it there is precisely so they do not have to move it physically when they want to use it.
Within the vaults of the Bank of England or recognized custodians by the LBMA, a bar can remain on the same shelf for decades while changing owners several times. In July 2026, through the London market's clearing system alone, 15.8 million ounces of gold were transferred, valued at 64.5 billion dollars.
That is why London continues to serve as one of the great safes of the planet. Countries do not store their reserves there solely because they consider their vaults safe, but because the gold deposited in London is located exactly where there is a huge number of buyers, sellers, and financial entities willing to operate with it. Having a portion of the reserves in the British capital allows for a combination of physical custody with immediate access to the market, although it also requires assuming the strategic cost of keeping a part of the national wealth outside its own borders.