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Renminbi Internationalisation and its Effects on Gold

By Chinese Gold and Silver Exchange

Published on April 10, 2021
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The Covid-19 pandemic exerted a significant impact on the global economy and each country’s response to the pandemic was a critical turning point in their economic development, which further affects the global gold market.

According to the World Gold Council, a total daily average of $145 billion in gold contracts changed hands worldwide in 2019, a sum higher than US Treasury bills and the S&P 500 index. In 2020, gold’s average daily volume grew further as it expanded by more than a quarter.

In January 2021, Dr Haywood Cheung, was re-elected as the Chairman of the Chinese Gold and Silver Exchange (CGSE). He believes that the global pandemic created a paradigm shift and that gold would become a stronger and more attractive asset to buy and hold.

Dr Cheung foresees that the renminbi (RMB) will gradually become the base currency for the settlement of gold. Historically, gold transactions have been dominated by the United States (US) and United Kingdom (UK), and the pricing standard mainly refers to two the US dollar or British pound. However, the pandemic has caused the global dynamic to shift. According to CNBC, China could overtake the US as the world’s largest economy earlier than expected. US gross domestic product (GDP) fell by 2.3% in 2020, while China’s grew by 2.3% amid the coronavirus pandemic. Many countries adopted quantitative easing to fight against the impact of Covid-19, which has weakened their currencies. In contrast, China has remained firm with its currency policy, which has strengthened the foundation for the RMB to be deemed as the gold settlement base currency.

China could OVERTAKE the US as the world’s largest economy earlier than expected

Gold Digitalisation

CGSE announced the exploration of the digital gold project (GoldZIP) in 2019. GoldZIP is a digital token that allows holders to redeem physical gold at CGSE authorized vaults. Gold bars are deposited by CGSE members and its quality is assured by the Hong Kong Precious Metal Assay Centre, a HOKLAS-accredited laboratory. Each GoldZIP token is backed by an equal amount of physical gold. And thanks to blockchain technology, the total amount of tokens issued is transparent to the public. With the launch of GoldZIP in the first half of the year 2021, CGSE aims to modernise physical gold trading as a core business. Dr Cheung believes that this can also speed up the process of RMB internationalisation.

Covid-19 is a big challenge which can turn into an opportunity

“Covid-19 is a big challenge which can turn into an opportunity”, Dr Cheung said. “It surely created a blow to the local economy and it also lets people in Hong Kong to reflect on the importance of adopting digitalisation in traditional business. For example, classic gold trading could be completed digitally with GoldZIP”.

The advantages of digital gold include low minimum investment, high security, and price spread clarity. Retail investors can execute transaction orders by mobile application and capturing the price swings conveniently, anytime and anywhere. Urban digitalisation in China has inspired our gold digitalisation process as well. CGSE has worked diligently with the authorities, such as Hong Kong’s Financial Services and the Treasury Bureau (FSTB) and other regulatory bodies, on GoldZIP.

Innovation Based on Tradition

Gold trading is a key business in Hong Kong for CGSE, which was founded in 1910. The bourse prides itself on constant and innovation across its 100-year history. The gold trading business flourished during the 1970s as the ban on its import and export was lifted.

As an ancient Chinese proverb would say: “During good times, we buy antiques and during bad times, we buy gold”. Gold has always been a safe haven during economic turmoil. In the face of the pandemic, China-US tensions and other geopolitical issues, gold has become a popular investment. First, it is easy to liquidate gold assets into fiat currencies. Second, gold is a strong tool to fight against inflation.

For the same reason, Dr Cheung suggests the public should increase gold holdings to protect themselves during uncertain times. “When someone is fearful, I get in. When someone is buying, I am fearful. If you are aiming for mid to long-term investment, short-term market fluctuation shall be ignored. You can treat it as market noise”, he said about gold investing.

About CGSE

Chinese Gold & Silver Exchange (CGSE) was established in 1910  and is among the few exchanges in the world that has both an open outcry and an electronic precious metals trading platform. It is Hong Kong’s only physical gold and silver exchange approved by the government. CGSE has a membership that comprises 171 corporate members from the precious metals industry to represent key stakeholders, which includes banks, large jeweller groups, bullion merchants, gold refineries, and financial institutions.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.