Rubble guards buried treasure of COMEX gold Reuters September 13 2001 at 08:44PM By Alden Bentley New York - Nearly 12 tonnes of gold appears to be buried under mountains of debris from New York City's destroyed twin towers, where experts said it was securely out of reach of treasure hunters, looters and, for now, even the bullion trading community. The bars, worth about $106 million, were stored in an underground warehouse near the World Trade Centre and held on behalf of the COMEX metals trading division of the New York Mercantile Exchange. "It's probably safer than it's ever been. It's probably buried under 107 stories of rubble," said Jonathan Potts, president at FideliTrade Inc, the Wilmington Del.-based parent of the Delaware Depository Service Co., an official COMEX warehouse for silver. The gold is held in the vaults of ScotiaMocatta, the metals and bullion trading division of Canada's Bank of Nova Scotia and one of the two official depositories that hold gold for delivery against futures contracts traded at the COMEX. A spokesperson for NYMEX, which is still shuttered, had no comment on COMEX's warehoused gold. According to COMEX data published by Reuters Monday night, before two hijacked aircraft demolished the Manhattan landmarks and symbols of New York's financial might, there were 379,036 Troy ounces or about 3,800 bars of 100 ounces each held in safe-keeping for the exchange by ScotiaMocatta. "The bars are still there. Obviously, they are going to be able to dig them out N unless they melted and disappeared," speculated one dealer at a precious metals trading firm in New York. Larry Scott, global head of ScotiaMocatta in Toronto, told Reuters by telephone that for security reasons he could not discuss the location of precious metals on deposit with the firm. "All our staff that work in the depository are safe and well," said Scott, "Operations are obviously not normal, but we have no concerns at this time, either security or financial. "Everything is not normal, but everything's OK," he said. Another 413,134 ounces of COMEX gold is in the storage facility of HSBC Bank USA, located far from the carnage. HSBC would not comment on its storage facility. Experts said the quantity buried downtown amounts to about 2 percent of the 600-tonne-a-day global bullion market. There would probably be little long-term disruption in physical trade if it remained temporarily unavailable for shipment, they said, even if the week's turmoil causes more safe-haven buying of gold. "This is a futures market," Scott said. "The big movements of physical metal take place at the Bank of England and the Federal Reserve. It's trivial next to the rest of the market." In London bullion trade Thursday, spot gold ended at $280.00/$282.00 an ounce, up from London's close Wednesday at $279.00/$281.00. Volumes remained thin as dealers stayed on the sidelines, after pushing bullion sharply higher Tuesday in a spasm of flight-to-quality buying. The COMEX, which also trades futures and options in silver, copper and aluminum, has been closed since Tuesday but NYMEX is working on getting its off-hours ACCESS trading system running on the Internet by later Thursday. Potts said that metal could be delivered from alternative facilities at refiners elsewhere in the United States. Any remelting into the 100-ounce bars of 99.5 percent pure gold acceptable for COMEX delivery specifications would take a bit of time. "There could be some potential squeeze on some physical products," Potts said. "I don't believe it's going to be necessarily dramatic." "If there are settlements that are getting delayed because that metal was destined to come out of that facility, I'm sure they are coming out of alternative facilities." The COMEX trading floor, located at One North End Avenue is in lower Manhattan. The NYMEX has said its facilities were largely undamaged by the collapse of the nearby towers.