Last updated September 16th, 2018.
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 while currencies in the region suffer. Because of this, firms in Singapore, Indonesia, and Thailand are taking advantage of the situation.
Singapore is taking the lead in becoming Southeast Asia’s gold hub. They have ambitious plans to grow their share of worldwide sales to 10-15% by 2025 from just 2% right now.
The city state repealed a 7% tax on buying gold and silver back in 2012 making precious metals trading tax free. Singapore believes lower costs will help them become a major global market for investing in gold. They’re probably right.
“It’s unfair to put a sales tax on what is essentially money. The removal of GST on gold will allow Singapore to better compete with Hong Kong and other bullion trading centers in the region” according to Nick Trevethan, commodity strategist at ANZ Singapore.
Indonesia, Thailand Becoming Hubs to Invest in Gold
You can spot clear signs of Asia’s gold bullion obsession. Sales numbers show this on the buy-side. Yet it’s even more obvious on the sell-side.
Companies related to selling precious metals and the logistics involved are popping up across the continent. Meanwhile, existing players are heavily expanding.
Indonesia’s government-owned miner PT Aneka Tambang (AnTam) is opening three new stores in Yogyakarta, Medan and Batam, for example.
The company’s director of operations says 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 use gold futures to determine the desired future of gold prices, without having to pay in full.” said Kesara Manchusree, managing director of TFEX.
Investors around the world should consider the options to buy, store, and invest in gold. Demand in Asia will increase while the region continues grabbing market share from western competitors such as Zurich and London.
We at InvestAsian still think some investments can preserve your wealth even better than gold though. The easiest answer isn’t always the best one.
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