Singapore Bullion Market Association

Website Sponsor

Article List

Article List

Gold: Back in Favour

By Finews Asia

Published on March 28, 2019
Continue Reading
This area is for SBMA corporate members only.
To view this content, please log in.
Not yet an SBMA member?
Learn more about SBMA membership here

Gold is back: after five years in the doldrums, investors are snapping the precious metal up in large quantities. Here are the reasons for its revival, and why demand is expected to remain strong in Asia.

Central banks have added more gold to their reserves than at any time since the 1970s. Russia is the most active among the buyers, according to recent figures provided by the World Gold Council (WGC).

In 2018, central banks around the world added 651 tonnes of gold to their holdings, the biggest net increase since 1971, when the free convertibility of the U.S. dollar into gold was suspended by the Nixon administration. And data shows that last year’s net increase is the second-highest ever.

The demand for gold by central banks increased 74 percent from a year earlier. With the price of gold at about $1,310 per ounce, the volume of the metal purchased by central banks corresponds to about $27 billion.

Even as demand for gold soared, the price didn’t increase at the same pace. The reason is the level of supply. Mines around the world produced 3,347 tonnes of gold last year, a new record. The recycled volume also reached a record 1,173 tonnes.

Still, experts say that the price of gold may soon rise substantially as several factors combine to form the perfect storm. First, they say gold is becoming more attractive as the equity bull market is coming to an end, forcing investors to shop around for other assets.

Second, with volatility increasing, investors are looking for stability, which may also benefit the gold price. And third, the dollar is expected to get weaker this year – also benefiting the gold price. The US dollar and gold tend to move in opposite directions.

The fourth aspect is a lack of trust in the US under the guidance of President Donald Trump, which in turn may help depress the dollar further – thus pushing up the price of gold.

Fifth: a currency crisis and level of indebtedness in many countries will whet the appetite of investors for gold, given its functions as a long-term safe haven. With a potential slump of cryptocurrencies also potentially imminent, some investors may be looking for other, more traditional, vehicles.

Sixth: the world is undergoing substantial change, with many industries facing challenges from resurgent technological competitors, with the «old» West grappling with the «new», dynamic East and a society that is getting older, putting pressure on pension systems designed for a different era. The sense of unease tends to favor investments in gold, analysts say.

Seventh: a stock exchange crisis may precipitate an even stronger decline of indexed products. A rapid decline in index products may lead to an ever faster and deeper crash, studies have shown.

It may be a little ironic that it is Russia that is leading a trend, having been crisis-ridden for so many years. The U.S. meanwhile is moving into a more isolated position and the dollar, which still is so important for the pricing of gold, is losing some of its importance.

Demand for Gold to Remain Strong in Asia

A weak global economic outlook, heightened geopolitical tensions and financial market instability are factors supporting gold demand, especially in Asia, where investors have long used the precious metal as a hedge against volatility.

“Gold jewellery and bar demand in Vietnam, Indonesia and Thailand showed high single-digit growth due to the weakening of regional currencies, the safe haven argument for gold in a volatile environment, and low unemployment rate. Going forward, these economies should continue to be resilient, and we should see strong single-digit gold demand growth in Southeast Asian countries in 2019,” Singapore Bullion Market Association (SBMA) CEO Albert Cheng told finews.asia.

Cheng however, pointed out the risks posed by escalating trade tensions, highlighting that while gold investment has benefitted from financial market volatility, physical gold demand in Southeast Asia slowed down significantly in Q4 last year due to headwinds caused by a volatile equities market and trade disputes between China and the U.S.

Strong gold demand in Southeast Asia bodes well for Singapore, which has in recent years positioned itself as the region’s gold hub, attracting precious metals participants with government initiatives to develop the country’s investment precious metals (IPM) sector.

“Singapore’s well-established infrastructure, advanced technology, mature legal system and triple-A sovereign credit rating make the city-state an ideal gold trading hub in Asia, and provide distinct connectivity for the industrialists in the region,” SBMA Deputy Chief Executive Gordon Cheung said.

Investment banks with a presence in Singapore that are active in the gold market here include ICBC Standard Bank, the Bank of Nova Scotia, Standard Chartered, UBS and JP Morgan.

This article was previously published by Finews at www.finews.asia.

PREV ARTICLE
NEXT ARTICLE
BACK TO INDEX

Singapore Bullion Market Association Secretariat-Lee-Jia-Yi

Lee Jia Yi

OPERATIONS & ADMIN EXECUTIVE
Before joining SBMA, Jia Yi worked as an Admin & Reporting Officer in her previous role. She holds a Diploma in Business & Social Enterprise from Ngee Ann Polytechnic. Jia Yi is responsible for managing and maintaining physical and digital files in SBMA, supporting invoicing processes, reconciling receivables and payables, coordinating meetings and conferences. Additionally, she will provide support to the team and assist the Business Director in managing the Association’s office operations and general administrative activities.

SECRETARIAT SBMA-Emily-Oh

Emily Oh

OPERATIONS & ADMIN EXECUTIVE
Emily Oh is the Operations & Admin Executive, a seasoned professional who values teamwork and effective communication. She is skilled at adapting to new challenges and takes a proactive and resourceful approach to every task. Before joining SBMA, Emily had experience coordinating international travel arrangements and spearheading community initiatives. Her role at SBMA will be providing operational and administrative support for projects and other matters to the team.

SECRETARIAT SBMA Clara-Chang

Clara Chang

MARKETING & COMMUNICATIONS EXECUTIVE
Clara Chang joins SBMA as the Marketing & Communications Executive, enriching the team with her extensive experience in content creation, social media management, and digital marketing. Prior to joining SBMA, Clara held the position of Marketing Executive at her previous job. She holds two bachelor’s degrees from the University at Buffalo, one in International Trade and another in Geographical Information Science. Her core duties will include maintaining the SBMA website, managing the quarterly Crucible newsletter, among other responsibilities.

SBMA Committee-Photo-john-levin

Mr John Levin

Global Metals
TD Securities
John Levin is the Head of Metal Sales & Trading – APAC at the Toronto Dominion Bank’s Singapore office. Prior to this role, he devoted seven years to leading precious metal sales for the ANZ banking group in his home country, Australia. Notably, from 2009 to 2011, John played a significant role on the management committee of the London Bullion Market Association while serving as the Head of Precious Metals Sales for HSBC Global Banking and Markets in the UK.

SBMA Secretariat-Fabian-Lew

Fabian Lew

MARKETING & COMMUNICATIONS OFFICER

Fabian was a Business Development and Marketing Associate before joining SBMA. He graduated from Singapore Management University with a Bachelor’s degree in Economics.

He has joined SBMA since February, 2022.

SBMA-margare-secretariat

Margaret Wong

BUSINESS DIRECTOR

Margaret Wong, Business Director at SBMA (Singapore Bullion Market Association), brought valuable experience from her previous role at the World Gold Council (WGC). Her tenure at WGC provided her with extensive exposure to the gold community in Singapore and the broader region. This background has been instrumental in establishing strong working relationships within the industry.

Margaret’s role at SBMA encompasses a diverse range of responsibilities. She oversees office management, business support processes, finance, and administrative functions essential for the smooth operation of the team and management committee. Additionally, Margaret handles membership matters, member communications, and addresses public inquiries related to SBMA.

One of Margaret’s key responsibilities is coordinating with the Event Management Company for SBMA’s prestigious annual event, the Asia Pacific Precious Metals Conference. This flagship conference plays a crucial role in the industry, making her involvement pivotal in its success.

Described as resourceful and self-motivated, Margaret Wong brings a wealth of skills and experience to her role at SBMA, ensuring efficient operations and effective engagement within the precious metals community in Singapore and beyond.

SBMA-Albert-secretariat

Albert Cheng

Chief Executive Officer

Albert Cheng joined the World Gold Council in March 1993 as a Regional Manager, becoming Managing Director, Far East in 2003. He retired at the end of March 2015 and was subsequently named its Advisor. He has also been an International Advisor to the Shanghai Gold Exchange since 2002.

His marketing career began with Dentsu Young & Rubicam, Hong Kong in the early 80’s. He began gold marketing in July 1985 when he joined the Royal Canadian Mint as a Regional Manager for Southeast Asia.

He was appointed honorary CEO of SBMA in November 2015. He is responsible for the success and strategic development of SBMA, represents the interests of the Association, and is responsible for all the legal and regulatory aspects of the work of the Association. He is the primary contact for regulators and government bodies on bullion market development.

Ms Pawan Nawawattanasub

Ms Pawan Nawawattanasub

CEO
YLG Bullion Singapore Pte Ltd

Pawan is the CEO of YLG Bullion Singapore and founder of YLG Bullion International. She has almost 40 years of experience in the jewellery industry and established YLG in Thailand in 2003. In 2012, she brought YLG to Singapore. She sits on the Board of Directors of the Thailand Gold Traders Association, the Thailand Futures Exchange’s Arbitration Committee, and the Rotary Bangkok committee. She holds a master’s degree in Political Science.

SBMA-Shaokai-Fan

Mr Shaokai Fan

Head of Asia-Pacific (ex China) and Global Head of Central Banks
World Gold Council
Shaokai Fan is the Global Head of Central Banks at the World Gold Council, responsible for advising governments on gold matters, and enhancing the gold market through engagement, dialogue, and thought leadership. He works directly with central banks and sovereign wealth funds on investment considerations. Prior to this position, Shaokai held multiple roles at Standard Chartered Bank, including Director for Asia Strategic Initiatives and Associate-Director for Public Sector coverage. Shaokai holds a Masters of Public Administration from Columbia University and the London School of Economics, and an undergraduate degree in finance and economics from New York University.

SBMA-Committee-Alan-Liew

Mr Alan Liew

Head of Bullion & Commodities Trading
United Overseas Bank Limited
Alan is Head of Bullion and Commodities Trading for Group Trading in Global Markets, United Overseas Bank (UOB). Alan joined UOB and started the bank’s commodities trading business in 2014, previously he spent eight years in Standard Chartered Bank (SCB) trading both precious and base metals. During his tenure at SCB, he obtained the SGE gold trader licence and was part of the pioneering team for the SGE business and the FX quantitative trading team. Prior to trading, he worked for Monetary Authority of Singapore in the Financial Risk Management Division. He holds a BSc (Hon) in Computer Science at National University of Singapore and a MSc in Financial Engineering at Nanyang Technological University.

SBMA-Committee-Nikos

Mr Nikos Kavalis

Managing Director
Metals Focus Singapore Pte Ltd
Nikos Kavalis is a founding partner of Metals Focus. He has over 20 years of experience in precious metals, having previously worked for the Royal Bank of Scotland and GFMS. Since September 2019, Nikos has been based in Singapore, where he also runs the local subsidiary of Metals Focus.

SBMA-Committee-khun nuttapong

Mr Nuttapong Hirunyasiri

CEO
MTS Gold Global Trading Pte Ltd
Nuttapong Hirunyasiri is the CEO of MTS Gold Group, one of Thailand’s top 10 companies and top 3 bullion companies. He started MTS Gold Group’s first overseas office in Singapore and has been expanding the group business internationally. He focuses on product development and innovation for gold investment, with the aim of being a leader in providing the full suite of gold investment services in the ASEAN region.

SBMA Committee-Photo-Raman-Walia

Mr Raman Walia

Executive Director, Head of Commodities Sales – APAC
JP Morgan Chase Bank N.A.

Raman is Executive Director and Head of Commodities Sales, APAC, for J.P. Morgan. He joined JPMorgan in 2008 in New York, moved to Singapore in 2011, and helped expand the precious metals business in the region. Raman has an MBA from Cornell University, and likes to travel in his spare time.

SBMA Committee-Photo-Andrew-Clarke

Mr Andrew Clarke

Head of Brink’s Global Services
Brink’s Global Services Pte Ltd

Andrew Clarke is the Head of BGS (Brink’s Global Services) for Singapore, Indonesia, Malaysia and Brunei. He has held various leadership positions throughout his career in secure logistics and risk management with Brink’s, which started in Hong Kong in 2010. Andrew relocated to Singapore in 2018 to expand the precious metals line of business along with Brink’s portfolio of services and industries.

SBMA Committee-Photo-Kazuya-Naoki

Mr Kazuya Naoki

Head of Metals, Asia
ICBC Standard Bank Plc, Singapore Branch

Kazuya (Kaz) Naoki is the Head of Metals, Asia of ICBC Standard Bank in Singapore and is responsible for the precious & base metals sales and trading in the region. He joined Standard Bank Plc Tokyo Branch in 2008 and was relocated to its Singapore Branch in 2013 whose controlling stake was acquired by the Industrial and Commercial Bank of China in 2015. Prior to joining Standard Bank, Kaz spent 11 years focusing on commodity trading and risk management with Mitsui & Co in Tokyo, Sydney and London. Kaz has been serving on the SBMA Management Committee since 2016.

SBMA Committee-Photo-Vinh-Nguyen

Mr Vinh Nguyen

Head of Precious Metals, Asia
StoneX APAC Pte Ltd

Vinh Nguyen joined StoneX Group in Singapore at the beginning of 2008 and responsible for its APAC precious metals activities since 2019 until now.

SBMA Committee-KL-Yap

Mr KL Yap

General Manager, Singapore Refining Business Unit
Metalor Technologies (Singapore) Pte Ltd
KL YAP is the General Manager of Metalor Technologies (Singapore) Pte Ltd’s Singapore Refining Business Unit. He joined Metalor in 2013, initially in Refining Sales. In 2014, he became Refining Business Unit Manager, leading the development of a new precious metal refinery. KL was Vice Chairman of SBMA from 2017 to 2021, now serving as Chairman. With a degree in business commerce, finance, and marketing, he brings prior experience from refinery and heavy industries.