As gold trade shifts eastward, Singapore is gradually becoming a leader in this market, said Shaokai Fan, the World Gold Council’s Head of Asia-Pacific and Global Head of Central Banks. He stated that Singapore is emerging as a gold trading hub, whilst gold consumption in main developing economies rises.
“One key reason lies in the country’s proximity to central banks, which are actively snapping up gold,” he explained. “This comes as gold consumption is rising in major emerging markets, most of which are concentrated in Asia.”
“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 in Singapore.
At the same time, China is the largest consumer of gold. In 2023, the People's Bank of China became the leader in the purchase of gold bullion, seeking to increase its gold reserves. In this regard, China has become the main factor in the rise in gold prices, experts say.
Japan has also demonstrated the stability of demand for the yellow metal. It posted the highest demand for gold jewelry in the first quarter of this year for the first time since 2019, according to a WGC report.
Similarly, South Korea recorded the sharpest quarterly increase in gold purchases in more than two years.
In addition, Singapore is in close proximity to approximately 25% of the world's gold supply centers, such as China, Australia, Indonesia, the Philippines, Papua New Guinea and Laos.
According to Fan, the need to create an official gold reserve center is becoming a growing challenge for central banks around the world, especially against the backdrop of an unstable geopolitical environment. Singapore could become a “truly viable alternative” to London and New York as a storage center for central bank gold, a WGC representative said. Moreover, the country's commitment to political stability and the abolition of sales tax on investment gold will only strengthen Singapore's role in the gold market, he added.
Since October 2012, the Singapore government has exempted investment grade precious metals from Goods and Services Tax (GST), also known as sales tax.
Hélène Tarin, Editor in Chief of the Asian Bureau, Rough&Polished
