Singapore Bullion Market Association

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APPMC: Market Updates


Published on June 10, 2021

The pandemic has mainstreamed the role and relevance of gold, particularly in the Asia Pacific context, but on-the-ground reporting and insights have proven difficult to gather, especially amid lockdowns and border closures.

Sessions on Day 1 of the Virtual Asia Pacific Precious Metals Conference gave participants an in-depth look into how the gold and precious metals industry has fared, and how it is evolving in Asean, the fastest growing regional market in the world, as well as India, the world’s second-largest consumer market for the precious metal.


New opportunities abound with the establishment of the International Bullion Exchange, which is located in the International Financial Services Centre in Gujarat International Finance Tec-City and became fully operational in July 2020 (fig. 1 & 2). Manoj Kumar, Executive Director, International Financial Services Centres Authority (IFSCA), noted the country’s world-class regulatory environment and focus on ease of doing business, and the unique opportunity for global bullion banks, refiners and other market participants to participant and grow India bullion market, particularly in terms of establishing standards and benchmarked products. He also highlighted the demand for a refiner and the implementation of a well-developed and renown refining framework/system.

Fig. 1 & Fig. 2

Source: IFSCA

Kumar noted that Indian households have stocked up to 25,000 tonnes of gold, the largest in the world, and that the country is the world’s second-largest importer of gold, with a demand of nearly 1,000 tonnes. In 2020, about 5,093 tonnes of gold were traded in the futures exchanges in India. As such, the time has come for India to think of how to liberate its passion for gold towards better standards around the International Bullion Exchange, he said.


Indonesia, Asean’s largest domestic market, is embarking on a journey to streamline its gold sector, and it expects to have a full-fledged bullion bank by 2024, Dr Adi Budiarso, Head of the Center for Financial Sector Policy at the Fiscal Policy Agency of the Ministry of Finance, Government of Indonesia, said. The country has potential gold ore resources of 14.95 billion tonnes, and it can develop a bigger bullion market share for both the domestic and global market. The initiative is still in its early days – the bullion bank implementation will start with a pilot project at a commercial bank, while a revision of the Banking Law and the Financial Service Authority (OJK) law are needed, along with a more streamlined tax exemption structure (fig. 3).

Most of Indonesia’s domestic gold production is for export, and the country still imports gold bullion to meet the needs of its jewellery industry. At the same time, gold futures trading in Indonesia has started to develop. In terms of business prospects, gold investment in Indonesia is dominated by baby boomers, though there is large potential to grow its interest among the millennial generation, which is increasingly receptive to gold consumption and investment, Dr Budiarso said.


Gold consumption in Malaysia was hit by the movement control order, implemented to control the coronavirus outbreak in the country. Jewllery shops and manufacturers had to remain closed during this time, but despite the poor economic conditions and high gold prices, there was little panic selling, Ermin Siow, Advisor, Federation of Goldsmiths and Jewellers Association Malaysia (FGJAM), said. He noted brisk sales among gold retailers due to government subsidies and aids, which brought a lot of liquidity to the market. In fact, listed companies Poh Kong and Tomei – the two largest in the gold jewellery sector – announced strong earnings. There has been no significant sellback of scrap gold, and local scrap is estimated 15 tonnes per year, from the country’s 4,000+ retail outlets, 1,000 sharia-compliant Al-Rahnu pawnshops, and 800 traditional Chinese pawnshops.

Fig. 3

  • In the first five years, the focus is on the Universal Bank concept by determining one or two commercial banks to act as bullion banks.
  • Then, adopting the concept of commodity trading with the regulators (FSA and Bappebti)
  • Next, preparing bullion bank as an expansion of the commercial bank business which requires industry preparation and its supervisory mechanism by the OJK (regulated in PP/POJK).
  • Finally, preparing for the potential expansion of the derivatives business which requires the strengthening the role of the capital market and derivatives market supervisor, especially in paper gold and other derivative transactions (regulated in P-OJK/P-Bappebti).
Source: Center for Financial Sector Policy, Indonesia

However, unlike retail sales, gold exports were badly hit. Gold exports in 2020 fell by about 70% to 13.5 tonnes from the year before (32 tonnes), due to border controls and a boom in domestic sales, which saw manufacturers and exporters focusing on the domestic market. At the same time, online sales of gold jewellery have been growing, so sales have not been too badly affected by the MCO. To overcome the lockdown, many retailers have switched to online sales, including live sales on social media platforms, Siow said, noting his optimism that things will turn around by the end of the year.


The past year has been a tough one for Vietnam’s gold industry, Le Tri Thong, CEO, Vice Chairman of the BOD PNJ Jewellery Group, reported. Even media outlets and the public have been asking if the industry is reaching its sunset days, Le said. Hit by Covid-19, total retail consumption in the country is shrinking and the jewellery market shrinking even faster as many jewellery companies have closed or suspended their operations, which has had a knock-on effect as many workers have left the jobs or the industry as a whole (fig. 4). The retail market started off 2020 well, but experienced a sharp decline of about 60% due to a lockdown in March and April, according to market data from PNJ and official statistics in Vietnam. The industry only saw a return to growth in the fourth quarter of 2020.

Fig. 4

  • The total retail consumption is shrinking
  • The “3 set of the Covid Match”
    • Market get worse in the 2nd set
    • Restart the match? – anytime?
  • Jewelry market – shrinking even faster
    • Many jewelry companies closed or suspended
    • Many workers left jobs / industry
Source: PNJ Jewellery Group