Gold bars
Ktsdesign | Science Photo Library
Singapore — According to the World Gold Association, Singapore is set to become a major gold hub as the gold trade shifts eastward.
Fan Xiaokai, head of Asia Pacific and global head of central banking, said one of the main reasons is rising gold consumption in major emerging countries, with most of these markets concentrated in Asia.
Singapore’s proximity to these central banks, which are actively buying gold, is another factor, he added.
“The gold market’s centre of gravity is shifting eastwards and we are fortunate that Singapore is well positioned as a potential fulcrum for this new balance,” Fang said at the Asia Pacific Precious Metals Conference in Singapore.
China is the world’s largest consumer of gold and its central bank has become the biggest buyer of bullion as the country seeks to build up its gold reserves.
Among central banks, the People’s Bank of China became the largest gold buyer in 2023.
Additionally, Singapore is in close proximity to around 25% of the world’s gold mining supply centres, including China, Australia, Indonesia, the Philippines, Papua New Guinea and Laos.
The need to secure an official gold reserve center is a growing concern for central banks around the world, especially in the context of a volatile geopolitical environment, Fan said, adding that Singapore could become a “genuinely viable alternative” to London and New York for central bank gold storage.
“Singapore is well poised to lead the gold market in the future,” said Fan, citing the country’s commitment to political stability and the abolition of sales tax on investment gold as other factors that could help the country play a key role in the future of the gold bullion market.
“The removal of GST on gold investments in Singapore and the establishment of quality delivery refineries in the country have strengthened Singapore as a major hub for gold trading,” Mr Fan explained.
Since October 2012, the Singapore government has exempted investment grade precious metals from the Goods and Services Tax (GST), also known as sales tax.