Gold bars
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SINGAPORE – Singapore is set to become a leading gold hub as trade shifts east, according to the World Gold Council.
Shaocai Fan, head of the Asia-Pacific region and head of global central banks, said that one of the main reasons is that gold consumption in major emerging economies is on the rise, and the majority of these markets are concentrated in Asia.
He added that Singapore's proximity to these central banks, which are active in buying gold, is another factor.
“The center of gravity of the gold market has shifted eastward, with Singapore serendipitously positioned as a potential fulcrum for this new balance,” Fan said at the Asia Pacific Precious Metals Conference in Singapore.
China is the largest consumer of gold in the world, and its central bank is the largest buyer of bullion as the country seeks to enhance its gold reserves.
Among central banks, the People's Bank of China was the largest buyer of gold in 2023.
In addition, Singapore is located in close proximity to approximately 25% of the world's gold mining supply centers such as China, Australia, Indonesia, the Philippines, Papua New Guinea and Laos.
Fan said the need to source an official reserve position for gold has become a growing concern for central bankers around the world, especially against the backdrop of the volatile geopolitical climate. He added that Singapore could become a “really viable alternative” to London and New York as a central bank gold storage hub.
“Singapore is poised to lead the gold market in the future,” Fan said, explaining that other factors that contribute to Singapore's important role in the future of the bullion market include the country's commitment to political stability and the abolition of the sales tax on gold investment.
“The abolition of GST on gold investment in Singapore, and the establishment of quality delivery refineries here, has strengthened Singapore as a leading gold trading centre,” Fan explained.
Since October 2012, the Singapore government has exempted goods and services tax (GST), also known as sales tax, on investment-grade precious metals.
