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 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The city state repealed a 7% tax on buying gold and silver in 2012, making precious metals trading tax free.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 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” according to Nick Trevethan, a senior commodity strategist at ANZ in Singapore.
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.” 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.
However, we at InvestAsian still believe some investments can preserve your wealth even better than gold.
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