Banks are charging more to store gold after a surge in demand for precious metals has left London, the centre of the global bullion market, short of vault space.

Almost all of the major bullion-dealing banks have raised fees since March this year, in some cases more than doubling the rates they charge for vaulting gold, according to clients of the banks and people familiar with the situation.

The development is a further sign of how demand for assets which are seen as safe is straining the financial system. Bank of New York Mellon announced last week it would start charging fees on large deposits after a sudden influx of cash.

And, yes Virginia, charging customers to store their cash is equivalent to a negative nominal rate of interest.

Of course negative nominal rates are down limited by physical storage costs, but they can and do exist.