Last updated September 26th, 2024.
Gold’s reputation as a storage of wealth and hedge against inflation is attracting investors across Asian markets.
This is especially true for those in the ASEAN region with local currencies declining against the U.S. Dollar, Euro, and other major world currencies lately.
There’s an increasing demand for gold and silver in many Southeast Asian markets. Buyers are turning to precious metals while currencies in the region suffer.
Because of that, companies in Singapore, Indonesia, Thailand, and elsewhere are taking advantage of the situation.
Singapore is the Front-Runner
Singapore is now taking the lead in becoming Southeast Asia’s top gold trading hub. They have ambitious plans to grow their share of worldwide gold sales from just 3% currently to between 10% and 15% before the year 2030.
The city repealed a 7% tax on buying gold and silver way back in 2012 and made precious metals trading tax free, making it one of few countries in the world to do so.
Singapore’s government thought that low trading costs would help them become a top global for investing in gold. And considering the market’s growth over the past decade, they were certainly right.
“It’s unfair to put a sales tax on what is essentially money. A removal of GST on gold will allow Singapore to better compete with Hong Kong and other bullion trading centers throughout the region” says Nick Trevethan, senior commodity strategist at ANZ Singapore.
Singapore’s Freeport is a highly secure vault located in the city’s Changi Airport. They offer a range of services including storage, shipping, display, and trade of gold/silver and other precious metals.
Indonesia, Thailand Becoming Hubs for Precious Metals
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), as an example, is opening three new stores in Yogyakarta, Medan and Batam.
AnTam’s director of operations says AnTam keeps track of sales figures in every region they’re operating in. He stated that AnTam’s focus cities are chosen based on local purchasing power and demand.
Furthermore, the Thailand Futures Exchange Index (TFEX) and seven other gold future brokers 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 and liquidity.
“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.
You might wish to consider the rising number of options to purchase 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 believe that some investments, including frontier market property along with a select few stocks, can preserve your wealth even better than gold and silver though.
The easiest or most obvious solution is not always the best one. Global investors now enjoy a greater variety of options than ever before. Think about your choices carefully.
FAQs: Gold and Silver in Asia
What Are Some Alternatives to Buying Gold and Silver in Asia?
While gold and silver have traditionally been popular investment options in Asia, there are several alternatives worth considering. Frontier market property is gaining attention as a potentially lucrative investment. These markets often offer high growth potential and can provide excellent diversification benefits to an investment portfolio.
Additionally, select stocks in Asian markets may offer attractive opportunities for wealth preservation and growth. The key is to look beyond the obvious choices and explore the diverse investment landscape that Asia has to offer.
Some experts suggest that certain investments could potentially offer better wealth preservation than precious metals. It's important to carefully consider all available options and think about your choices in the context of your overall investment strategy.
Are There Any High-Yield Investment Options in Asia?
Yes, there are several high-yield investment options available in Asia that investors might want to explore. For instance, some banks in the region offer attractive interest rates on deposits. Singapore's Phillip Bank, which operates across Asia, provides U.S. Dollar time deposits with yields exceeding 6% through their branches in Cambodia.
Real estate investments in Asia can also offer stable cash flow through rental yields, along with the potential for capital appreciation. Unlike stocks or bonds, property investments provide tangible assets that can be insured and are less likely to face bankruptcy risks.
It's worth noting that these high-yield options often come with their own set of risks and considerations. Investors should conduct thorough research and possibly seek professional advice before making any investment decisions.
How are Asian Currencies Performing? Should I Invest in Them?
Asian currencies have shown varied performance in recent years, with some facing challenges while others have demonstrated resilience. When comparing currencies over long periods, it's important to consider not just the exchange rate but also the relative purchasing power and performance against other global currencies.
Investing in Asian currencies can be a way to diversify away from traditional options like the US Dollar. While there may be some relative volatility, holding some of Asia's more stable currencies, such as the Thai Baht or Singapore Dollar, could be a worthwhile long-term strategy as Asian economies continue to develop.
However, currency investments come with their own risks, including potential economic and political instability in the respective countries. It's advisable to include Asian currencies as part of a well-diversified portfolio rather than as a standalone investment.
