Having overseen the custody of around 5,000 tonnes of gold for more than 70 governments as Head of Notes and Gold at the Bank of England, Jack Garrett-Jones brings a rare, system-level perspective to how global gold markets truly function. Drawing on his experience across central bank reserves, market infrastructure and international policy forums, he reflects on trust, custody risk, arbitrage, and why gold’s role is strengthening in an increasingly uncertain world.

Leading the world’s largest trading gold vault – with hundreds of billion in custody for 70 governments – must have been a unique responsibility. What did you learn from managing gold at that scale?

Personally, I’ll never forget the sheer awe of walking into a vault full of thousands of shiny gold bars for the first time. Not to mention just how heavy gold is – a typical big bar weighs 12kg/25 lbs – to the extent it must be stored according to structural engineering calculations to avoid damaging the building. 

Professionally, it was of course a huge honour and responsibility to be entrusted with hundreds of billions of assets belonging to not only to the citizens of the UK but also to dozens of other countries. That alone was a huge motivation to ensure that we maintained the highest of standards in our custody of their assets. 

Trust and security are the foundation of gold custody. How do you see these concepts evolving in an era of digital transformation and rising geopolitical tensions?

Both are of course becoming even more important as the world becomes more complex and challenging. It’s even more important for all those in the gold ecosystem to stay on top of the evolution of the market and ensure that they consider this for their own involvement. 

We are seeing more gold platforms and custodians spring up, including many outside the traditional financial system. These are hugely varied – such as crypto-based front ends tokenizing the asset and new vaulting players hosting physical gold. Such innovations mean interesting new opportunity/risk profiles for investors to consider – and I strongly recommend investors to consider both sides of the risk/opportunity coin.

You represented the Bank of England at the LBMA Physical Committee. How do you see the role of industry bodies in strengthening global gold markets?

Gold is inherently international. So cross-border industry bodies of course are particularly valuable.  Their work helps build a global gold market that is efficient, mitigates risks, and meets the needs of those who work with or own gold.

Indeed, many of the most meaningful recent improvements in standards across the gold and precious metals ecosystem have been driven by industry-led initiatives, and I expect this to continue.

Having engaged extensively with policymakers, regulators, and market participants, what do you think are the biggest misconceptions people have about how gold markets actually function?

Gold markets are far more diverse and interconnected than many people realise. A common mistake is to focus on the segment of the market one knows best, while overlooking the complexity of the wider system. For example: Markets such as COMEX futures, London physical, the Shanghai Gold Exchange, and others are linked by arbitrage activity. And large volumes of metal move around the world each year – even to the extent of affecting trade data. It’s important to take a holistic approach to gold markets in order to make the most of them.

What do you see as the greatest risks and opportunities facing gold in the next decade – both as a reserve asset and as part of the financial system?

Clearly, gold is becoming far more important as the world becomes more uncertain – as we can see from the rally in recent years. So it’s even more important to think holistically about gold holdings – including where and how to store the physical asset. This has been a major focus of my recent practice professionally as clients want to understand the impact of multiple risk scenarios.

Central bank reserves managers currently hold around $13 trillion of fiat assets. But other than gold (declared reserves around $6tn at the gold price as I’m writing), there are limited other deep and liquid markets to diversify reserves, making it likely that central banks will continue to increase gold holdings.

Investors more broadly are buying gold as a hedge against debasement risk, as well as against more traditional risk scenarios (including those playing out recently).

So is gold in a bubble or a structural repricing? We can see from the volatility alone that there are many speculative investors joining for the ride. Putting my macro hat on, gold would need to hit $11,000/oz just to equal its 1980 peak as ratio to today’s total global investable financial assets (ie equities and bonds). That’s not a prediction, but unless you expect the world in the next few years to become significantly more stable, and western governments’ debt to be controlled and reduced through fiscal prudence, I find it hard to imagine gold losing too much of its lustre. That said, there will of course be more volatility down as well as up, and conditions after 1980 did stabilise with the gold price bottoming out around 2000.

What action to take? I advise my clients to go back to first principles. What do they want to achieve from their investments, and particularly the precious metals element? Are they looking primarily for appreciation, a hedge for inflation, or protection from even larger global risks. We can then think about where and how best to hold gold to achieve their objectives – for example: how should custody be spread across jurisdictions and providers. 

Just to be clear: These are my personal thoughts and opinions and neither the views of any entity mentioned nor financial advice.