Gold bars
Ktsdesign | Science Photo Library
SINGAPORE — Singapore is set to become a leading gold hub as trading shifts east, according to the World Gold Council.
One key reason is that gold consumption in major emerging economies is rising, and a majority of these markets are concentrated in Asia, said Shaokai Fan, head of Asia-Pacific and global head of central banks.
Singapore’s proximity to these central banks, which are actively snapping up gold, is another factor, he added.
“The center of gravity of the gold market has shifted east, with Singapore, fortuitously placed as the potential fulcrum of this new balance,” Fan said at the Asia Pacific Precious Metals Conference held in Singapore.
China is the world’s largest gold consumer, and its central bank is the largest buyer of bullion as the country seeks to boost its gold reserves.
Among central banks, the People’s Bank of China was the largest buyer of gold in 2023.
Additionally, Singapore is in close proximity to about 25% of the world’s gold mining supply centers such as China, Australia, Indonesia, the Philippines, Papua New Guinea and Laos.
The need to source for an official gold reserve center has become a growing concern for central bankers around the world, especially against the backdrop of a volatile geopolitical climate, Fan said. He added that Singapore could become a “truly viable alternative” to London and New York as a hub for central bank gold vaulting.
“Singapore is poised to lead the gold market in the future,” Fan said, elaborating that other factors contributing to Singapore’s important role in the future of the bullion market include the country’s commitment to political stability and removal of sales tax on investment gold.
“The removal of GST on investment gold in Singapore, the establishment of good delivery refineries here have bolstered Singapore as a leading hub for gold trading,” Fan explained.
Since October 2012, Singapore’s government exempted the Goods and Services Tax (GST), also known as a sales tax, from investment grade precious metals.