Singapore is predicted to emerge as a prominent gold hub due to the eastward shift of trading activities, as highlighted by the World Gold Council. The growing gold consumption in major emerging economies, particularly in Asia, plays a vital role in this transformation. Shaokai Fan, who serves as the head of Asia-Pacific and global head of central banks, pointed out that Singapore’s strategic location near these burgeoning markets adds to its appeal. Furthermore, central banks in Asia are displaying a strong interest in acquiring gold, further positioning Singapore as a potential epicenter for this evolving market.
The transition of the gold market’s center of gravity towards the east reflects China’s significant role as the world’s largest gold consumer. Notably, China’s central bank stands out as the primary buyer of bullion, aiming to bolster its gold reserves. In 2023, the People’s Bank of China emerged as the largest purchaser of gold among central banks, emphasizing the region’s appetite for this precious metal. Japan and South Korea also demonstrated resilience in gold demand, with positive trends in jewelry consumption and overall gold purchases, respectively.
Singapore’s geographic proximity to major gold mining centers, accounting for approximately 25% of global supply, further solidifies its position as a key player in the gold market. The escalating need for a central gold reserve location is a growing concern for central bankers worldwide, especially amid geopolitical uncertainties. Fan highlighted Singapore’s potential as a credible alternative to established hubs like London and New York for central bank gold storage. The country’s commitment to political stability and the abolishment of sales tax on investment gold are crucial factors enhancing its attractiveness as a gold trading hub.
The removal of the Goods and Services Tax (GST) on investment-grade precious metals in Singapore since October 2012 has significantly boosted the country’s appeal to investors and traders. Additionally, the presence of good delivery refineries in Singapore has further cemented its reputation as a leading destination for gold trading activities. Fan emphasized that these developments, coupled with the prevailing market dynamics, position Singapore as a frontrunner in shaping the future of the global gold market.
Singapore’s strategic advantages, including its proximity to key markets, supportive government policies, and strong industry infrastructure, position the country as a pivotal player in the evolving gold market landscape. With the eastward shift of gold trading activities and the rising demand for gold in Asia, Singapore is poised to lead the way in becoming a preeminent gold hub in the years to come.
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