Why is the world’s gold under the streets of London?

0:02Niall:Sky News, the full story first.

0:11Coming up, the daily takes you deep under London's streets and into the vaults containing gold worth 500 billion pounds.

0:26Niall:Did you know that if you've ever travelled on the Tube in central London, you may have come within metres of more gold than you could ever imagine? Hi everyone, Neil here with another of our Friday profiles, and as you probably know, usually we'd be focusing on a person or an event in the news. This time, it's a place that's barely heard of, let alone making headlines. So why are we talking about it? Well, we are going to be following our economics editor, Ed Conway, as he makes his way beneath London into the Bank of England's vaults, and what I can only describe as a scene straight out of a Bond movie.

1:04Ed Conway:You are slightly lost for words when you get in there and just see this enormous expanse of this metal.

1:11Niall:Now, usually the media just doesn't get access to places like this. Not exactly a surprise. Given the Bank of England vaults are home to gold, worth more than the GDP of several small nations. What's really interesting is this pile of precious metal just keeps getting more valuable.

1:29Ed Conway:Back in the 1990s, gold was not really doing much. The price was pretty low, around$275 an ounce. Today, it's$5 ,000.

1:38Niall:So why is so much gold just sitting idle under London's streets? Who does it actually belong to? and didn't someone sell all of ours off a few years back? Ed Conway is here to explain all. Ed, take me inside this vault. You're not allowed in. I've got a vision of Scrooge McDuck and piles of gold coins. Is it anything like that?

2:03Ed Conway:No, there's no Scrooge McDuck, but it is, in some ways, it's kind of how you'd imagine it. So the Bank of England, it's being rebuilt quite a lot of times over the years and the most recent rebuild goes back to the 20s, the 30s, at least this bit of the vault. And so a lot of it still, it's old school, massive steel doors, you know, those big round handles that you've seen in the movies, literal kind of combination locks and things like that, but on an enormous scale. And the amount of security around it is exactly as you'd imagine. It's enormous. You have to go through series of series of series of gates and doors.

2:37Ed Conway:So it's slightly labyrinthine. But then eventually you kind of turn around this corner and suddenly they're before your eyes. And I, you know, I'm a kind of, I like to think of myself as a relatively rational person. I've been anticipating this moment for a long time. I've been covering economics for many years. And for more than 20 years, I've been asking to go and see in the vault and have been told no, because basically no one gets to go down there. And then somehow managed to persuade them this time around. So I've been thinking for a long time, what's this going to feel like when I see it?

3:12Ed Conway:And it is still, there is something still quite flooring. You know, you're slightly lost for words when you get in there and just see this enormous expanse of this metal, which it is alluring when you see gold in person, particularly like ultra pure gold. What form is it in?

3:33Niall:I mean, I've just got images of brick upon brick upon brick of gold.

3:35Ed Conway:Yeah, it's gold bars. Each of them is worth, you know, getting on for like one and a half million pounds. It depends on what's going on with the gold price. So they're worth a lot more than they were a few months ago. Roughly how much gold is inside this vault? There are 12 vaults and each of them is big. And this particular vault had 62 billion pounds worth of gold in it. Didn't take any souvenirs, did you? 62, no, if only. I mean, that's the thing. You're not allowed to take your phone in. You're not quite weighed on the way in and the way out. So that's one of 12? That's one of 12. That, I think, was for me the thing.

4:10Ed Conway:First of all, going in this vault and seeing all of this gold and thinking, blimey, I mean, that's a lot of gold. But then secondly, you can look through the doors into the next vault. The lights weren't on, but even though the lights weren't on, I could see this kind of glimmering from beyond there, and that was another underground room. The bars are very heavy. So you got to hold one? I got to hold a couple of them now. They are really, really heavy. I think it was like kind of 12 kilos or something like that, or 14 kilos, to the extent that it really, it feels heavier than almost anything else you would kind of lift.

4:45Ed Conway:They are stacked four high, so there's four pallets high. They cannot stack them any higher than that, because if you did, so London is built on clay, and if you had more than four pallets stacked on top of each other, the bank would sink into the ground. That's how heavy this stuff is. It is extraordinarily heavy.

5:04Niall:So 12 galleries, 12 vaults, I should say. The one you were in, what, about 50? So what, hundreds of billions of pounds worth of gold?

5:13Ed Conway:Large enough numbers that they are somewhat meaningless, except to say this is the second biggest storage facility for gold anywhere in the world. The only one that's bigger is the New York Fed. But there's a distinction, which is that the Bank of England is actually only one of a number of vaults around London. Most people are unaware of this. If you take the tube into London, go on the central line, and you'll notice when you get close to Bank Station, the tube starts kind of curving around and it's quite noisy. There's this clankiness. And when you kind of get off at Bank Station, have you noticed how the platform is really curved?

5:49Ed Conway:And mind the gap, there are really big gaps there. The reason the line is curved is because it is designed to go around the vaults of the Bank of England because they've all basically always been there, one form or another. And when you're in the vaults, you can hear the tube kind of off. I don't know how far away it is, but you can hear the central line as it's going by. So know that when you're kind of getting off the tube or kind of like coming into backstation, you're going within a few hundred yards of the single biggest store of gold anywhere in Europe. And like I say, this is just one of a number of vaults around London.

6:26Ed Conway:London has more physical gold in and around the city than any other place on the planet. On the planet. We were the nation that invented the idea of the gold standard, which was this idea that if you had currency, it had to be backed by gold. That goes back to the era of Victorian British Empire, even earlier than that. It's one of the curious things is Britain still, when it comes to the trade in physical gold, there is nowhere else like London for doing it. And going to the bottom of the Bank of England, to this hidden city, it's like 40 % of the bank is actually subterranean, underground vaults.

7:04Ed Conway:They're storing gold down there. They've got some precious, other precious metals as well. They've got cash, you know, enormous trolleys, pallets of cash there. And I, like, obviously it's a bank. I mean, some of this stuff is obvious. What did you expect? Yeah, but even now, you know, in 2026, it's the physical asset that is there. Whose gold is this? I thought we had sold all our gold off. I mean, you mentioned the gold standard there. The whole point of the gold standard was basically back in the day, if you were a country, a nation, your central bank would have these big reserves of gold. And they would have to do that because all of the cash they were issuing would have some equivalent amount of gold back in your vaults.

7:40Ed Conway:That has all gone now. Even so, if you're a nation trying to manage your finances, trying to think about where your currency is, trying to ensure that people have credibility in you, it's important to have some forms of reserves. Assets, basically. Basically assets. And chief among those assets historically has been gold. It's not the only thing that you can have. So the UK used to have over 700 tons of gold, okay? But back in the 1990s, gold was not really doing much. The price was pretty low, around, it was$275 an ounce. Today, it's 5 ,000. Dear Lord. 5 ,000. So basically Gordon Brown sold just over half of the gold that we had in our reserves back then.

8:22Ed Conway:And at the time everyone was like, well, that seems like a pretty reasonable, not everyone. But then later on, the price started to rise. And it rose throughout, you know, in the build up to the financial crisis. And then it rose afterwards and it's just carried on going. There've been ups and downs, but gold is now at this extraordinary recent high of about$5 ,000 an ounce. And there's still some gold in there, in the vaults that belongs to the UK. About 300 tonnes or so. The kind of answer to your question is, who owns this gold? It is partly the UK, but the vast majority of it is actually owned by other central banks around the world.

8:57Ed Conway:And the point here is, the Bank of England is acting as the bank for you. If you're a central bank somewhere around the world, if you've got a bunch of gold, you can keep some of it at home. But if you want to actually use that gold and go out and trade it, there is one place in the world which is head and shoulders above everyone else for that, and that is London. If you're flying out of Heathrow, particularly if you're going to Switzerland, or maybe if you're flying into Heathrow from South Africa, from Johannesburg, there's a pretty good chance there's a bar of gold somewhere on the plane. Because, yeah, most of the gold that is transported in and out of London goes on the bottom of jets.

9:32Ed Conway:You know, it needs to get there quickly. It's relatively small. And this is whilst I'm paying 20 quid so I can check a bag. Exactly. Exactly. And yet, and yet, so the gold is there. There are, I don't know exactly how many, but there are bars in the Bank of England which belong to the Central Bank of Venezuela. And for years, ever since, I don't know if it started on the Chavez or Maduro, but the Venezuelan regime has been saying, we want our gold. And the Bank of England, well, it's kind of mostly the government, to be honest with you. But the government has been saying, no, you can't have your gold.

10:05Ed Conway:And there have been court cases about this where the Venezuelans are saying, no, this is our gold. How can you be keeping it from us? And then the British government saying, well, we don't recognise you as the government and therefore how could it be your gold? And so it is drummed into you that what you're looking at is the bedrock for central banks all around the world.

10:25Niall:Let's talk then about the price. One of those gold bars a year ago was just a bit over a million quid. Why are we seeing such inflation when it comes to the price of gold?

10:35Ed Conway:Gold historically has always been seen as this hedge against catastrophe. If you're really nervous that it's all going to kick off one way or another, whether it's economically or geopolitically, then people tend to buy gold because it's seen as the ultimate store of value. And what's happened in the last few years, you've had a war on the fringes of Europe. You have a US president who is declaring trade war on pretty much everyone. The world feels like a much more dangerous place than it was before. it kind of probably goes to reason that if the world is more dangerous, then you've got more people who are more nervous.

11:09Ed Conway:And as a result, they're buying assets, which they think are going to retain their value. And that's the key thing. The other thing, by the way, is if you think inflation is going to be a big thing, then again, the currency is going to be eroded. The value of the currency gets eroded when inflation is happening because your pounds are going less far or dollars or whatever else. Gold is seen as this ultimate store of value. So a lot of people have been buying a lot of gold recently, and the price has just gone haywire. And not just gold, by the way, you know, other things, you know, Bitcoin, although that's gone down as well as up.

11:39Ed Conway:And silver, silver has gone crazy too.

11:41Niall:But just anecdotally, I mean, go on any social media platform and you will find those finance bros giving out advice. It's wall to wall. Get your money into silver. Get your money into gold. Look at the return that I've had over the past couple of years. Is it really as secure as everyone seems to be claiming?

11:57Ed Conway:That kind of thing often happens when an asset has gone up really sharply. Then you have a lot of people saying, oh, you know, keep buying this thing. Every time people get really nervous, they tend to lean into gold. And at the same time, you have something else happening, which is more nuanced, but interesting as well, which is when Russia invaded Ukraine, one of the things that happened was all of the G7 nations said, we are going to confiscate some of the reserves that you hold. Not in gold, actually, in this case, but we're going to confiscate some of the mostly like European bonds, most of which were in, I think, Belgium.

12:33Ed Conway:That was seen as one of those big watershed moments because that was other nations basically taking an asset that belonged to Russia and doing it kind of without notice. And if you are, let's say China, or indeed anyone else, to be honest with you, and you're looking at what's just happened there, and you're going, would I rather have gold there or would I rather have it here? Then you're seeing a lot of nations buying up more gold, putting it into their own central banks, just because they're nervous about what would happen in the event of there being war.

13:08Niall:But this is not a market that is in and of itself immune to volatility, isn't it? I mean, we saw gold plummet, I think I've got the figures right here, plummet by 9 % in January.

13:18Ed Conway:Yeah. What was going there, partly the fact that there had been so much nervousness about what was going on with the US economy. In particular, just no one was sure who Donald Trump was going to appoint as the chairman of the Federal Reserve. That's the head of the central bank in the US. It couldn't be more consequential for inflation. If you think inflation is going to kind of go through the roof, then you want more gold, all else equal. If you think it's going to be someone totally nutty in charge, then you want more gold because who knows what's going to happen to inflation. So this isn't all driven by scarcity then?

13:46Niall:Because, I mean, you've been in the vaults. There's loads of this stuff. No, I mean, it's not really driven by scarcity.

13:49Ed Conway:It's a market. It's a financial market. I mean, clearly there is still gold being mined at the moment. And one of the bars I looked at in the Bank of England, that was from, I think it was maybe even 2026. It had just come out of the ground, basically, and just been refined. So there's still gold kind of coming into the market. It's reflecting the nervousness out there and some of the idiosyncrasies and some of the fact that people want to have gold in their own nations. Each of the gold bars has a number on it and a code on it. And the ownership of that bar is denoted by the code. And when we were filming, we had to be very careful because we couldn't show any of those serial numbers.

14:25Ed Conway:But each of those numbers has a code. And basically, if you're buying or selling Neil's gold in the Bank of England, if you're selling one of your bars, then essentially what happens is just someone else would get possession of the bar. It wouldn't physically move at all. It would stay put. However, this time last year, because a lot of people were expecting Donald Trump to put massive tariffs onto gold, a lot of people started moving physical gold from the Bank of England over to New York. And you had this strange situation where they couldn't, because it's quite physically difficult to get in and out of the vaults, they had this problem of just like, they couldn't get the gold out fast enough to fly it across to the US so that people could then put it into America.

15:07Ed Conway:A lot of that gold has come back now because Donald Trump didn't put tariffs on gold. But it is a weird kind of market. And the fact that London still has this residual position in it, largely just as a result of history rather than anything else, is one of those curios. A lot of people are constantly speculating that maybe, you know, there might be this moment where we lose that crown as well. But it hasn't happened yet.

15:29Niall:So is that ultimately gold's main purpose right now? You've got a ring on your finger there. I think plenty of people will be imagining Mr. T and big gold chains around his neck.

15:39Ed Conway:Jewelry is still a big part of the market, particularly in India and China. And China is the biggest miner of gold in the world. But the vast majority of that gold stays in China. For a lot of people within, particularly Asian cultures, jewelry is seen obviously as adornment, but it's also seen as investment and it's part of your endowment and your wealth. So that is still a big part of the market. And so there's a funny thing, if you talk to people who are in the gold market, they are thinking about jewellery as well as thinking about the kind of pure asset form. And there are some industrial purposes of gold.

16:11Ed Conway:You know, there's some electronics purposes and a few things like that. But aside from jewellery, the main purpose of gold is to basically be dug out of the ground, refined, and then turn into a bar and then put back under the ground at places like the Bank of England.