Proposed federal laws in the U.S. aim to expand the variety of facilities storing precious metals

Middle East Turmoil Highlights Precious Metals Supply Chain Vulnerabilities

Ongoing instability in the Middle East is causing significant disruptions to global supply chains. While the physical precious metals sector has not been directly affected by the conflict in Iran, the resulting volatility in international financial markets reveals that these assets are not entirely shielded from such risks.

In response, new federal legislation in the United States has been proposed to address these potential threats. The goal is to enhance the nation’s precious metals storage system and minimize systemic risks within American financial markets.

Introducing the SILVER Act

On Thursday, Representatives Russ Fulcher (R-ID) and Mark Harris (R-NC) unveiled the “System Integrity through Licensed Vault Expansion and Resilience Act” (SILVER Act). This bill aims to revise and expand the geographic restrictions on approved depositories for precious metals connected to regulated futures markets.

Currently, U.S. law requires that exchange-approved precious metals vaults be situated within approximately 150 miles of New York City. Lawmakers and industry experts argue that this concentration creates vulnerabilities, potentially threatening market stability, national security, liquidity, and investor accessibility.

Expanding Storage Across the Country

Representative Fulcher emphasized that establishing approved vaults in various regions would reinforce the supply chain for precious metals. He stated, “Locating metal depositories in multiple U.S. regions will give Americans nationwide affordable access to metal exchanges and protect assets during national emergencies or severe weather events. The SILVER Act mandates at least two approved depositories in each of the Eastern, Central, Mountain, and Pacific time zones, thereby enhancing the system’s integrity and resilience.”

Benefits of a Broader Vault Network

Supporters of the bill highlight that a more geographically diverse vault network would strengthen the role of gold and silver as key monetary assets in global markets. Organizations like the Sound Money Defense League argue that secure storage facilities in other regions—especially in the Western U.S., where much of the nation’s mining and refining occurs—would boost market resilience and accessibility.

Industry participants note that expanding the number of approved depositories would increase storage capacity, enhance liquidity, and lower costs for investors, producers, and institutions by reducing unnecessary transportation and storage expenses.

“Expanding access to qualified storage facilities nationwide will improve efficiency and lower entry barriers,” said Stefan Gleason, CEO of Money Metals Depository, one of North America’s largest commercial gold and silver vaults. “This initiative is not only about reducing financial system risks given the strategic importance of gold and silver, but also about aligning market infrastructure with actual supply chains.”