Singapore: A Potential Gold Hub in a Changing Landscape

Singapore is poised to become a major gold hub as trade shifts eastward, with the World Gold Council noting this trend. The growing demand for gold in emerging markets, particularly in Asia, is driving this shift. Shaokai Fan, the Asia-Pacific head and global central banks head, spoke at the Asia Pacific Precious Metals Conference in Singapore and highlighted Singapore’s proximity to active central bank buyers of gold as a significant advantage.

China, which is the world’s largest gold consumer, has its central bank as its primary buyer of bullion for reserve building. In 2023, the People’s Bank of China was the top purchaser of gold. Additionally, Singapore’s location near major gold mining hubs like China, Australia, and Indonesia enhances its strategic position as a potential reserve center amidst volatile geopolitical conditions.

Fan believes that Singapore has the potential to emerge as a competitive hub for central bank gold vaulting and an alternative to traditional hubs like London and New York. He noted Singapore’s commitment to political stability and its recent move to remove sales tax on investment gold as factors contributing to its growing importance in the global gold market.

In October 2012, Singapore exempted investment-grade precious metals from the Goods and Services Tax (GST), significantly boosting its attractiveness as a gold trading center. Furthermore, the establishment of good delivery refineries further reinforces Singapore’s position as a leading hub for gold trading in the future.

In conclusion, Singapore is well-positioned to become a prominent player in the global gold market due to its strategic location near major mining hubs and active central bank buyers of bullion. Its commitment to political stability and recent moves towards promoting investment in precious metals are also significant factors that contribute to its growing importance in this sector.