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Going for gold? Don't forget the vault
By Clementine Wallop
The Wall Street Journal
Thursday, December 20, 2012
Investors in Asia are increasingly dealing with a seemingly anachronistic problem: finding a place to stash their bars of gold.
Gold is a popular choice for those seeking to diversify their holdings and spread risk but it isn't the most mobile of assets. Still, gold has been moving east, and that has created opportunities for security companies in Singapore, Hong Kong, and Shanghai -- financial hubs where the metal's popularity is soaring.
Security companies are busy ordering two-ton steel doors and sophisticated monitoring systems, and hiring more armed guards as they expand their high-security vault capacity in Asia.
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GoldMoney adds Singapore vaulting option
In addition to its precious metals storage facilities in Hong Kong, Switzerland, Toronto, and the United Kingdom, now with GoldMoney you can store gold and silver in Singapore in a high-security vault operated by Brink's Singapore Pte Limited. To celebrate the launch of this storage option, GoldMoney is offering a discount on buy and exchange fees at this vault for any orders above US$10,000 (or the equivalent) until January 11, 2013. Tthe gold buy rate is 0.98%, while the silver rate is 1.99%. Metal exchanges into Brink's Singapore will also be discounted for this period and will be charged at 0.78% for gold and 1.75% for silver. Simply place your order online and the above rates apply automatically until January 11, 2013, 15.00 UK time. To find out more about the new vault, please visit:
GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults.
It's easy to open an account, add funds, and liquidate your investment. For more information, visit:
Brink's Co., for example, has increased its storage space for precious metals in Singapore more than threefold over the past year, to 200 square meters, and is building a bonded warehouse in Shanghai to store high-value consumer goods and precious metals.
"We are growing, and driving that growth is the storage of precious metals and also bank notes," said Jos van Wegen, the company's senior manager of global services in Singapore.
Comprehensive data on the volume of high-security storage capacity in the region isn't available. But demand for gold is clearly rising.
China's gold demand in the third quarter of this year was 176.8 tons—16% of global demand and up 47.1% from the same period three years ago, according to the World Gold Council. Hong Kong's demand totaled 6.9 tons in the third quarter this year, up 56.8% from the third quarter of 2009.
Singapore imported 36.7 tons of gold in the first 10 months of this year, well down from 62 tons in the full year 2011. The government's announcement in February that, in a bid to become a gold-trading hub, it would scrap a 7% goods and services tax on gold, silver and platinum hurt imports for much of the year. Fourth-quarter gold-import figures for Singapore are expected to be stronger, World Gold Council executives say.
While physical gold requires storage space, it does offer a lot of value in a relatively small package. At around $1,690 a troy ounce, a metric ton of gold is valued at $54.3 million, but would take up only slightly more space than a standard case of 12 wine bottles -- though most gold is stored in ingots.
Malca-Amit, a company that stores and transports diamonds and precious metals, has lockups in Hong Kong and Singapore, and is preparing to open one in Shanghai in the first quarter next year. The Shanghai vault will also hold art and luxury goods such as high-value mobile phones and designer handbags.
Malca-Amit's Singapore vault, capable of holding 600 tons of gold, is almost full, and the company is seeking more space. The amount of gold stored there has increased 200% from a year ago, it says.
Its recently opened Hong Kong vault can hold 1,000 tons of gold, which would be worth more than $54 billion. It is almost large enough to hold the official reserves of China, which total 1,054 tons, according to World Gold Council data.
Malca-Amit has gold-storage sites in New York and Zurich, but the focus of its expansion is firmly on Asia, executive director Joshua Rotbart said. Some Asian investors who are storing their gold in the U.S. and Europe are keen to move it closer to home as more storage space becomes available, he said.
Vault operators say banks are among those seeking to spread their risk by holding gold in a variety of locations, rather than a single stronghold in London or Zurich. Some private investors fret about tougher rules and the scrutiny of Swiss and other Western banks, they say.
"There is a trend for moving assets east," Mr. Rotbart said. "Western clients are getting a bit nervous; people are afraid of increased regulation and doomsday scenarios."
Marc Faber, editor and publisher of the online financial journal Gloom, Boom, & Doom Report, is one such investor.
"Individuals are making a mistake if they're holding all their assets in one country…I still have the majority of my gold in Switzerland, but I am already moving gold to Asia," he said. "I am not 100% sure how safe my gold is in Switzerland."
It isn't only Asians moving their assets, he said. "More and more European families are coming to Asia, not only for their assets, but also to live."
Mr. Faber said his Asian storage center of choice is the Singapore FreePort, which is designed for a range of valuables from precious metals to art. It is located in its own duty-free zone near the city's airport.
Singapore FreePort opened in 2010 and is already doubling in size to 50,000 square meters, including more storage space for precious metals. Brink's and Malca-Amit have vaults there.
The team behind the Singapore FreePort, Euroasia Investments SA, is planning an expansion into Beijing, where the facility will mostly store art for wealthy Chinese investors.
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