Citigroup is preparing to join the exclusive club of banks at the centre of the world’s largest gold-trading hub, partnering with secure logistics firm Malca-Amit to use its vault near London’s Heathrow Airport as the bank moves toward becoming a clearing member of the London bullion market.
The move would see Citigroup become only the fifth clearing member of the London market, joining JPMorgan Chase, ICBC Standard Bank, HSBC and UBS Group — a group whose numbers have dwindled in recent years even as the market’s importance has grown. Clearing members occupy a pivotal role in the London market, settling tens of billions of dollars in transactions every day in a city where more than $1 trillion in gold is held in storage. Vaulting capacity is central to that function, allowing precious metals to physically change hands to settle contracts.
Malca-Amit’s facility near Heathrow — bullion vaults are typically located close to airports to facilitate the swift movement of metal by air — was described in a 2012 profile as capable of holding more than 300 tonnes of gold and 1,000 tonnes of silver. At current prices, 300 tonnes of gold would be worth approximately $43 billion.
Citigroup’s approach of contracting with an external custodian mirrors the model used by UBS, which also relies on a third-party vaulting arrangement rather than operating its own facility. By contrast, JPMorgan and HSBC both maintain their own London vaults, while ICBC Standard Bank acquired Barclays’ London facility in 2016. JPMorgan’s vault in the City of London is among the largest gold stores in the world, holding close to 1,000 tonnes on behalf of a single bullion-backed exchange traded fund — a holding worth roughly $136 billion.
The timing of Citigroup’s expansion into the market reflects a broader surge in investor appetite for gold. Bullion prices have risen approximately 45% over the past year, significantly boosting revenues from vaulting services, which are typically calculated as a percentage of the value of gold stored. Citigroup and JPMorgan declined to comment on the matter. Malca-Amit did not respond to a request for comment.
