(Kitco News) - Citigroup Inc. and Morgan Stanley are establishing their own vaults in London as they look to challenge JPMorgan’s dominant position in the global market amid soaring gold prices and elevated investor interest.
According to a Bloomberg report published on Monday, the two banks are among several financial giants gearing up to compete with JPMorgan Chase & Co. by offering their own vaulting and clearing services in the global gold capital.
According to people familiar with the matter who were not authorized to speak publicly, Citi is already well advanced in the process of setting up a UK-based business that would enable it to become a clearing member of the London gold market. Other sources said Morgan Stanley’s plans are at an earlier stage, but it also intends to expand its physical precious metals offering to include vaulting and clearing. Spokespeople for Citi and Morgan Stanley declined to comment.
More than $1 trillion in gold is stored in London, and clearing members serve a crucial role by maintaining vaults where precious metals can be exchanged to settle contracts. But only four banks currently operate these vaults today: JPMorgan, HSBC Holdings Plc, UBS Group AG and ICBC Standard Bank Plc are the four current clearing members of the London gold and silver markets, while the Bank of England provides storage mainly for other central banks’ bullion holdings.
JPMorgan has become the biggest player in the city’s precious metals market in recent years. “The US bank is custodian of the lion’s share of the exchange-traded fund gold in London, and also accounts for a large share of the remaining holdings outside the Bank of England,” the report noted.
“We’re delighted to see that there has been a series of banks who have been interested” in becoming clearing members, London Bullion Market Association CEO Ruth Crowell told journalists on Monday, though she declined to identify the interested banks.
Newly appointed independent LBMA chair Paul Fisher also spoke with reporters about the prospect of new clearing members. “The talk was always: ‘Is it a club which won’t let anybody else in?’ Well, having an independent chair facilitates that,” he said. “We’ve certainly been saying for many years it should be open.”
“It’s not a zero-sum game,” Fisher added. “The more clearers you get, the bigger the market. It’s good for everyone.”
Vaulting fees are typically calculated as a percentage of the value of the gold stored, and they have shot higher as gold prices have gained over 50% since the start of 2025.
Crowell conceded, however, that operating a vault is expensive. “It is a big commitment in terms of investment,” she said, but added that “assuming negotiations go well” there should be more clearing members within the next year.
