Gold is booming — and that's not a good sign

The price has soared by 50 per cent in less than a year as jittery investors start hoarding. Jonathan Prynn delves into the vault...

- Jonathan Prynn

The streets of London may not be paved with gold, as the young Dick Whittington was naively led to believe.

But there is certainly plenty of it piling up below ground level, in the private vaults that worried investors hope will give them shelter from the storms engulfing the world economy.

Driven by an unprecedented collection of geopolitical anxieties, the price of gold is rocketing, up by 50 per cent this year and rising still. The situation has persuaded those with sufficient means that only the yellow metal can hold its value when the world is going to hell in a hand cart.

The factors range from the federal shutdown in Washington, tariff wars between the world’s two biggest economies, France's inability to form a stable government, and warnings from the Bank of England about the risk of a “sharp correction” to overvalued stock markets. And since it is unwise to keep gold stashed at home, this is good news for the operators of the vaults — the financial equivalent of panic rooms — where ingots, coins and jewellery can safely be left.

From the pavement, Stanhope House, a Grade II listed property on Park Lane, still looks like the splendid Mayfair residence it used to be. But it hides a secret. Cross the portal and you enter one of London's most secure private vaults. Not that getting inside IBV International Vaults is easy — as you would hope. This is Mayfair's own miniature version of Fort Knox.

Just to get to the top of the stairs requires a retina scan. At the bottom of the stairs you pass through a three-a-half tonne, high-grade steel door allowing you entry to the vault equivalent of an airlock. The second door opens only when the first is locked and a fingerprint has been recognised.

Only then can you enter the inner sanctum, a steel-lined room with AK 47-resistant glass surrounded by 500 secure boxes. Most are now full, so there are plans to double capacity.