Inside the vault housing gold’s youth boom
The soaring price of gold is creating a boom for security box providers and traders, driven in part by a new and growing source of demand – younger buyers seeking other ways to build wealth after being priced out of buying a home.
Precious metal trading company ABC Bullion says the amount of money that has poured into its Gold Saver accounts, which allow people to trade physical gold, has surged by 150 per cent in the past year.
“Pre-COVID, the demand was driven, I’d say almost exclusively from people aged 45 and above,” ABC Bullion general manager Jordan Eliseo told The Australian Financial Review.
“The share for gold demand that is coming from younger Australians now, Gen Z’s under 30s, you name it, is quite significant … we’re seeing a much bigger share of new clients and people that are investing in gold coming from that younger demographic.”
Millennials and Gen-Zers, the generations increasingly replacing Baby Boomers as the largest cohort of economically active people, are focusing on alternatives to property, once an investment rite of passage that is becoming increasingly unreachable.
The gold price is above $5050 an ounce after increasing by more than 40 per cent in the past 12 months as global economic uncertainty stokes fear in the sharemarket.
The gold buying spree has caused a surge in the business of where to store the precious metal.
Guardian Vaults, one of the country’s biggest independent security box facilities, has had revenue grow by 61 per cent, its customer base surge by 55 per cent and inquiries rise by 47 per cent since July 2024.
“Our primary business is the [security] box business, but we’ve got a growing gold business,” said chief executive Sally Laycock. “To buy silver, you can start at a price point of $55 and you can buy a silver coin. The lowest grade of gold is one gram minted, and it’s like $204.”
Chief financial officer Adam Blythe said Guardian Vaults had worked hard to increase their stock holdings so that anyone who wanted to buy physical gold or silver could do so immediately, one of the main reasons why people were attracted to precious metals in the first place.
“People want to buy and get it straight away,” he said. “We’d normally buy, order it from the refiner, wait until it’s delivered, then we’d contact them [the customer], they come and get it.
“That’s probably allowed us to grow a bit more than maybe what the market has grown overall.”
Behind an inconspicuous entrance in Melbourne’s CBD sits the company’s 900-square-metre, heavily secured Collins Street operation with six vaults storing millions of dollars worth of gold and other goods.
In 2022, Guardian Vaults leased what used to be the National Bank of Australasia’s former head office, built in 1929, to house everything from valuable documents to precious metals.
Their vaults in the Fort Knox-style basement are more than 100 years old and house thousands of security boxes in 21 different sizes that range in cost from $199 to $10,000 a year for larger safes. The price of individual vaults is bespoke and subject to negotiation, with three currently leased by institutions.
One of the vaults Guardian inherited from the bank may never be opened, as there’s a chance its door is laced with explosives or will release a noxious gas if drilled into. What’s inside is a mystery.
Some of the old NAB security boxes contain uncollected treasures, either forgotten or unaccounted for in ex-customers’ wills.
“People put things in there and forget about them,” Laycock said.
The vaults are protected by security cameras, as well as alarms and a “smoke cloak” device that clouds a vault and can be set off if unauthorised movement is detected.
Sophisticated technology like biometric facial recognition also keeps the vaults secure, a big upgrade from decades ago when NAB used handwritten cards to record who their customers were, with descriptions as basic as “woman who usually wears a scarlet coat”.
