Daily Market Update

Singapore Continues Push To Become Asian and Global Gold Hub

Today’s AM fix was USD 1,316.50, EUR 976.05 and GBP 823.43 per ounce.
Yesterday’s AM fix was USD 1,321.75, EUR 978.71 and GBP 824.34 per ounce

Gold fell $4.20 or 0.32% yesterday, closing at $1,321.10/oz. Silver dropped $0.18 or 0.37%, closing at $21.56. At 3:22 EDT, Platinum slipped $9.66 or 0.7% to $1,417.74/oz, while palladium fell $3.23 or 0.5 to $710.97/oz. 

Gold inched down this morning as the short term trend remains lower after the surprise and unusual price falls seen last Friday dampened renewed positivity after the ‘taper caper’. Gold appears likely to test support at the $1,290/oz to $1,300/oz level again this week – possibly today or tomorrow when there is a COMEX futures option expiration.

Gold has frequently come under selling pressure in the day or two prior to and on the day of COMEX futures option expiration in recent years and prices have often recorded intermediate lows and offered good buying opportunity to those brave souls who like to try and time the market.

Gold in USD – 1 Year  (Bloomberg)

Gold will be supported by physical demand in Asia which should pick up due to China’s Golden Week. 

‘Golden Week’ begins October 1, and typically sees increased coin and bar purchases from store of wealth Chinese buyers. Volumes for spot gold of 99.99% purity, the benchmark contract, climbed to a one-week high of 13,952 kilograms yesterday, Shanghai Gold Exchange (SGE) data show.

The U.S. Mint sold 12,000 ounces of American Eagle gold coins so far this September, surpassing August’s 11,500 ounces.

The wealthy Asian city state of Singapore which has become one of the world’s most important financial centres in recent years continues its push towards making Singapore a global gold hub to rival New York and London.

Singapore has been trying to persuade Thailand’s top five gold traders to establish footholds in the city-state as it aims to become a centre for gold price referencing in Southeast Asia  before the ASEAN Economic Community (AEC) takes shape in 2015, according to the The Nation.

It reports that the Singaporean government dispatched a team to Thailand to offer relaxed regulations and tax incentives to traders who open offices in that country. It wants to become a reference centre for global gold prices.

An executive at a leading Thai gold company said that while  "Thailand’s gold market has become bigger and better known in the past few years. It’s ranked third in Asia. [Thai] gold traders also want to upgrade themselves to international standards." He continued saying that if the Bank of Thailand “imposes stringent controls on the gold trade, possibly exchange-rate lock-ups and a price-settlement system”, his company will “consider the Singapore option”.

"Several gold traders plan to have offices in Singapore as trading bases instead of in Thailand," according to another industry source.

The very negative treatment of gold by the government in India is encouraging companies involved in offering gold and gold related investments in India, to consider moving to Singapore.

Gold in GBP – 1 Year (Bloomberg)

In October 2012, in a shrewd move, the Singapore government removed a sales tax on gold and silver. Already, there are significant flows of gold into the city state as wealthy investors,  ultra high and high net worth individuals and  family offices are opting for Singapore as a safe location for gold storage.

Gold in EUR – 1 Year (Bloomberg)

Singapore is already the fastest growing wealth center in the world with $550 billion in assets under management, according to research firm WealthInsight and now aims to become a gold trading and storage hub. 

In recent years, industry players have opened storage vaults, started delivery services for precious metals from mints, and opened new trading desks for gold to meet investor demands.

Specialist vaulting companies have seen an increase in business and western banks have noticed the trend and are also offering precious metals storage in Singapore.

Singapore is catering to the rising demand for bullion coins and bars and for vaulting and storage in Asia. As one of the region’s largest trading hubs and the fastest growing wealth centre in the world, Singapore is well-placed to capture 10% to 15% of world gold bullion trade in the next decade. 

Singapore is the beneficiary of rising demand for precious metals throughout Asia due to concerns about devaluing paper currencies and a high regard for gold, in particular, as a store of wealth.

Gold Halts Two-Day Retreat on Signs of Increased Physical Demand – Bloomberg

Gold grasps at gains after two days of declines – Market Watch

Gold firms after 3-day drop, Fed uncertainty persists – Reuters

Rare Gold Coin Sells For $2.5m – Times of Malta

We’re Witnessing One of the Greatest Failed Experiments in Economic History – Chris Martenson

Gold Safer Than Fiat Currencies and Bitcoin
– International Man

QE Worked For The Weimar Republic For A Little While Too – Economic Collapse

JPMorgan Says "Buy Gold" – Zero Hedge

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Mark O'Byrne
Executive Director


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