By Nicholas Frappell, Global Head Institutional Markets, ABC Refinery
Australia’s relationship with gold began in the mid-19th century, marked by a monumental gold rush centred in the Victorian gold fields. This event fundamentally altered Australian society – an impact later historians deemed revolutionary.
The magnitude of this gold rush was only surpassed by California’s gold rush, which occurred roughly three years earlier. Economists, including British economist William Stanley Jevons, were skeptical about the value of gold digging, viewing it as “almost a dead loss of labour as regards the world in general – a wrong against the human race”.
Yet, the residents of Melbourne, both then and over 170 years later, as well as the nation of Australia, would strongly contest this view. Today, the gold industry thrives, having invested A$1.6 billion (S$1.42 billion) in production in 2021 and generating A$25.80 billion in revenue in 2022.
Karl Marx worried that these new discoveries would bolster markets, provide new homes, and open investment opportunities, potentially postponing the inevitable crisis of capitalism. His bleak outlook proved to be one of the most prescient among his peers, for all the right reasons. Despite the skepticism from some European intellectuals, there are numerous tales of entire ship crews, from the captain to the deckhands, deserting their posts to venture inland in hopes of striking it rich.
Australia is estimated to have produced approximately 95 tonnes of gold in 1856, and around 1,898 tonnes over the forty-five years spanning from 1851 to 1896.
SOCIAL CHANGE
The gold rush not only brought prosperity but also ignited a rebellion among miners against British rule, an event commemorated by ABC Bullion’s “Eureka” minted coins and tablets. This period also catalysed significant social changes that led to enhanced parliamentary democracy in Australia.
Additionally, this era marked the first significant collaboration between Australia and China in the gold sector, with over 30,000 Chinese miners participating in the rush. Some of their distinctive mineshafts are still visible in the countryside today, notable for being cylindrical in shape, so that evil spirits would not be able to find a convenient corner to lurk in and then leap out to snare an unwary miner.
Gold production decreased after the fervour of the 19thcentury gold rushes subsided.
Gold miners at work in Victoria (Image: The National Museum of Australia)
Num Pon Soon Society Building, Melbourne
THE TWENTIETH-CENTURY BOOM
Heading into the late 20th century, Australia witnessed a significant resurgence in gold production, starting in the late 1980s.
Australian Gold Production 1975-2022
Source: Geoscience Australia, World Gold Council
The boom in gold production that began in the late 1980s continues to this day in Australia. This surge was accompanied by innovations in banking and risk management that allowed producers to secure capital through associated hedging. The 1990s are often seen as a golden era for banks providing facilities to miners, enabling them to sell their future production forward. This was encouraged by high nominal Australian yields, creating a favourable environment for selling forward production into a contango.
This period of innovation sometimes led to unforeseen financial exposures. As spot gold prices rose towards the end of the 1990s, some producers were harshly exposed, leading to a more cautious approach to hedging among producers seen today. Additionally, the belief that the bear market, which began in 1980, ended with the start of the new century, influenced the industry’s strategies.
Australia now ranks as the third-largest gold producer globally, producing well over 300 tonnes annually, as per the latest World Gold Council data. Australian gold producers benefit from robust environmental protections, strong workplace and investor safeguards, and competitive all-in sustaining costs (AISC). Geological surveys indicate substantial undeveloped gold reserves, suggesting a sustained future for the industry.
In an era where consumers are increasingly conscious of the impacts of extractive industries, Australia stands out for adhering to best practices in mining and processing ores. This, combined with positive domestic public sentiment towards gold mining and its benefits to local communities, positions Australia favourably compared to its global peers. The industry’s public support is crucial, as opposition can hinder the granting of new permits and the expansion of existing or development of new projects.
RETAIL INVESTMENT
Gold has become an increasingly popular investment in
Australia, driven by several factors enhancing its appeal. The
trading, vaulting, and access to clear and reliable information
about gold as an asset have significantly benefited the retail
gold market. ABC Bullion capitalised on this trend by opening
its flagship store in the heart of Sydney’s CBD, enhancing the
customer experience in purchasing precious metals.
ABC Bullion Global Flagship, Martin Place Sydney
Additionally, gold and silver investments are popular choices for Self-Managed Super Funds (SMSFs). Australia’s pension savings, known as superannuation, represent a substantial and growing sector. The SMSF sector alone is projected to expand by A$1.5 trillion over the next two decades from its current size of approximately A$900 billion, reflecting a growing trend toward including precious metals in retirement portfolios. This growth underscores the increasing integration of gold into diverse investment strategies.
Projected Growth Self-Managed Funds 2023-40 in A$ Billions
Source: ASFA, ABC Refinery
As awareness grows of gold’s unique attributes – a liquid asset that holds no liability and is weakly correlated with a variety of other assets – the interest in incorporating gold into long-term savings and investment plans is expected to increase. This trend highlights gold’s role as a stable and attractive option for diversifying and safeguarding portfolios against economic fluctuations.
FUTURE TRENDS
Gold is poised to benefit from increasing acceptance and awareness across all classes of investors, from retail buyers to sophisticated family office investors. A key trend driving interest in gold is the focus on provenance. This appeals to buyers who are conscious of the origins of their gold holdings and wish to ensure their investments are sourced from environmentally and ethically impeccable sources. As such, exchange-traded funds (ETFs) are increasingly requiring verifiable provenance of their gold holdings.
ABC Refinery is responding to this trend by developing gold
provenance technology, aimed at providing customers with
assurance that the gold they purchase has been responsibly
and ethically mined and refined.
Regionally, there’s a trend towards regularising domestic sales of gold bars and jewellery, ensuring retail buyers can trust the sourcing and purity of their purchases. This movement is evident in various Asian countries and is expected to lead to more efficient and trustworthy markets. Singapore is emerging as a key hub in this respect within the ASEAN community, not only in terms of volume and sophistication but also through its thought leadership in the industry. This regional focus is likely to enhance the overall market for gold by ensuring higher standards of transparency and ethical practices.
Gold has a deeply rooted and esteemed history in Asia, arguably one of the longest and most celebrated worldwide. Advancements in the production, processing, and supply of gold in Australia are set to strengthen the ties between Australia and the Asian markets, promising mutual benefits. This closer collaboration is likely to enhance the exchange of technology, expertise, and economic gains, contributing positively to both regions’ gold industries.
NICHOLAS FRAPPELL is the Global Head of Institutional Markets at ABC Refinery. He has extensive experience in precious metals trading, having worked in London, Tokyo, Singapore, Hong Kong, and Sydney. Nick holds a Masters in Finance from the University of London and is the Chair of the LBMA membership sub-committee. He also cohosts the ABC Refinery “Pod of Gold” podcast and will speak at the 7th APPMC 2024 Conference on the Precious Metals Price Outlook Panel.
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.
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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.