Gold’s reputation as a storage of wealth and a hedge against inflation has attracted investors in Asian markets. This is especially true for those in the ASEAN region, with local currencies declining against the U.S. Dollar and Euro.

There’s an increasing demand for gold in many Southeast Asian markets. Buyers are turning to precious metals as currencies in the region suffer. In response, firms in Singapore, Indonesia and Thailand are taking advantage of the situation.

Singapore aims to be the hub for gold storage in Asia, for example. They have ambitions plans to grow their share of worldwide demand to 10-15% by 2025 from just 2% right now.

The city state repealed a 7% tax on buying gold and silver, making precious metals trading tax free in 2012. Singapore believes lower costs will help them become a major global market for investing in gold.

“It seems a little unfair to put a sales tax on what is essentially money. The removal of the GST on gold will allow Singapore to better compete with Hong Kong and other bullion trading centers in the region” Nick Trevethan, a senior commodity strategist at ANZ in Singapore told Reuters.

 

Singapore’s Freeport is a highly secure vault located in the city’s Changi Airport. It offers a range of services including storage, shipping, display, and trade of gold and other precious metals.

Indonesia, Thailand Becoming Hubs to Invest in Gold

PT Aneka Tambang (AnTam), Indonesia’s government owned miner, is opening three new stores in Yogyakarta, Medan and Batam. The company’s director of operations says that AnTam keeps track of sales figures in every region they operate in. He stated that cities were chosen based on local purchasing power and demand.

Furthermore, the Thailand Futures Exchange Index (TFEX) and seven other gold future brokerages in Thailand are adding options for gold futures trading. The plan will let investors settle expired contracts with physical gold, adding to the metal’s utility.

“It’s an alternative to investors, gold shops, and others who can use gold futures to determine the desired future of gold prices, without having to pay in full. Physical gold settlement should enhance flexibility and help to better balance their risk” said Kesara Manchusree, managing director of TFEX.

Investors around the world should consider the options to trade, store, and invest in gold. Demand in Asia will increase while the region continues to take market share from western competitors such as Zurich and London.

 

About Chandra Alatas

Chandra is the assistant manager of a large portfolio of residential and commercial real estate with holdings in Singapore and Jakarta, Indonesia. He is a specialist in property and REITs in Southeast Asia and the Middle East.

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