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The Future of the Gold Investor

By Vikas Shenoy, Head of APAC Origination & Partnerships, InfiniGold

Published on January 12, 2021

Over the past two decades, economic activity has made a gradual shift toward the digital realm, with today’s largest companies intrinsically linked to the world of the internet, digital commerce and digital infrastructure. In fact, internet-centric technology has probably been the single most important means of allowing companies and individuals worldwide to carry on with their businesses and lives during the Covid-19 lockdowns.

The pandemic has accelerated digital adoption in 2020 – and this could well be the inflection point for the investing community. Financial investing is becoming more mainstream, with the ubiquitous adoption of smartphones enabling access to mutual funds, ETFs, stocks, commodities, and more. Robinhood, the notoriously popular trading app, has been attributed, rightly or wrongly, to some seemingly inexplicable moves in the stock market. Now valued at nearly US$14 billion, it boasts more than 13 million users. Revolut, another fintech giant, has reinvented itself from a travel solutions provider to a fully-fledged digital bank, now offering commodities and crypto trading.

In parallel, there is a not-so-silent revolution brewing in the cryptocurrency space. The past year has seen cryptocurrencies shed some of their taboo and integrate with traditional finance. Square, the American payments firm led by Twitter CEO Jack Dorsey, invested US$50 million in Bitcoin, while Paypal will soon enable customers to buy, sell and spend cryptocurrencies within its ecosystem of 26 million merchants. Marking a first among traditional banks, DBS plans to launch a digital currency exchange, bringing cryptocurrencies under a regulated regime in Singapore.

GOLD AND THE GOLD INVESTOR

Gold has a unique place in an investor’s portfolio, having proven its worth over centuries as a store of value, hedge against inflation, and an asset beyond the reach of over-zealous central banks and politicians. Yet for the next generation of investors, gold will have to compete with ETFs, stocks, mutual funds and cryptocurrencies for a place in their portfolios. The average age of a Robinhood user is 31 years, while the average age of a Revolut customer in Singapore is 35. Would they want to store and insure a kilobar of gold in a vault for a hefty fee? Or would they demand easy, instant access to gold in a quantum of their choice, where they can sell or exchange instantly and securely?

In its recent report on Chinese retail gold business, the World Gold Council highlighted that gold is a vital component of the Chinese investor portfolio, with six of the top 11 investment products linked to gold (bars, coins, jewellery ETFs, etc.). Also, the two major drivers of gold investment are simplicity (“easy to buy and sell” and “no complicated arrangement or management”) and reassurance (counterfeit gold and storage issues).

When reporting on US retail gold investing trends, the World Gold Council stated that over one-third of US investments is made exclusively online, led by cryptocurrencies. It also noted that “there are further untapped opportunities to deliver gold through digital platforms”. Again, it was stressed that “the foremost driver is simplicity. They want products that they understand, that are accessible, and that are easy to buy and sell”.

To address these concerns and make gold a freely investable asset, there are two key methods available: digitisation and fractionalisation.

  • Digitisation broadly refers to a digital representation of the underlying physical gold asset in an immutable and secure manner, via an ETF, digital certificates, or tokenised assets.
  • Fractionalisation is the ability to buy or sell a fraction of gold, much like with fiat currencies.

There are a few companies taking the lead in providing the necessary technological rails for the precious metals industry to cater to this need.

InfiniGold, for example, has enabled The Perth Mint to “virtually” open up its vault to the average investor looking to purchase gold without the hassle or cost of storage, security or ongoing fees. Gold, backed by the Government of Western Australia, can be bought for as low as US$0.02 at any time from anywhere.

Another example is Icecap, which launched its diamond-backed token earlier this year, enhancing the gem’s accessibility and liquidity, resulting in free price discovery and a much fairer market. Previously, purchasing diamonds on the retail market yielded an instant loss, as several brokers and intermediaries would already have taken a share of the profits by that point.

Uphold, a financial services company, combines a platform app with payment rails, enabling users to spend 30+ currencies, including tokenised gold, on their debit cards. So, in theory, you could buy your Starbucks coffee with gold! In countries with unstable political regimes or hyperinflation, there is clear value in developing gold as a reserve currency alongside the US dollar.

HOW TOKENISATION CAN TRANSFORM THE GOLD INDUSTRY

Tokenisation simply refers to converting an asset into a cryptographic token on a blockchain database. At the heart of it, it is just another secure way to represent the value of the underlying physical asset.

As the world continues to weather the coronavirus crisis, global supply chains remain disoriented and disrupted, with globalisation curtailed. It’s never been more important for companies in emerging markets to access liquidity and keep supply chains moving efficiently. Tokenisation provides a new way for companies to effectively tap into digitisation – opening up the sector to an entirely new demographic of global investors, and creating a new business model for sustainable international trade.

Several leading commodities companies have piloted tokenised products over the past 18 months. For example, Nornickel, the Russian smelting giant, is in the test phase of tokenising palladium, cobalt and copper.

There are a handful of popular gold-backed tokens in the cryptocurrency space. These gold tokens cater to the new-age digital asset investor, who want to store and grow wealth within the cryptographic ecosystem. Barring the presence of a handful of gold companies like The Perth Mint and MKS, the gold tokenisation ecosystem needs active involvement from traditional gold refiners and jewellers to provide legitimacy, regulation, and the necessary direction to the industry.

It is becoming increasingly evident that digitisation of commodities and the advent of related cryptographic currencies are here to stay. The gold industry has historically been slow to adapt to and adopt new technologies; not being at the centre of this rapidly evolving digitisation conversation may prove detrimental to the long term-interests of the industry and the investor community.

VIKAS SHENOY is Head of APAC Origination & Partnerships at InfiniGold, a commodities digitisation company that provides a Platform-as-a-Service (PaaS) offering to the precious metals industry. Prior to joining InfiniGold, Vikas spent nearly 10 years in commodities sales and trading with Société Générale, ANZ Bank and Deutsche Bank, across Mumbai, London and Singapore.

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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.