Did you know that, according to Capgemini and the Royal Bank of
Canada’s latest World Wealth Report, there are now more millionaires in
Asia than North America…?
An estimated 3.37 million individuals in the Asia-Pacific region have
a liquid net worth of over US$1 million. That compares to 3.35 million
in North America.
The same trend is evident in the gold market.
While the current world hubs for gold trading and storage are London,
Zurich, and New York, stores of physical metal are also beginning to
migrate east. Gold storage facilities are springing up all over Asia
like mushrooms after a summer rain.
Back in 2009, the Hong Kong Airport Authority set up the first secure
gold storage facility inside the confines of the Hong Kong Airport.
This September, Malca-Amit, the Tel Aviv-based diamonds and precious
metals company is opening a second state of the art facility at the
airport, which will have capacity for 1,000 metric tons of gold.
That compares to the 4,582 tons that the US government claims is in
Fort Knox, and the record 2,414 million tons that the world’s exchange
traded gold funds collectively held – mostly in London– as of July 5th.
Malca-Amit also has a facility in Singapore’s Freeport complex, and
the company is planning a third Asian precious metals storage facility
in Shanghai in the near future.
Speaking of Singapore, Simon has written before that the government
there recently announced a series of incentive measures aimed at
grabbing as much as 15% of the world’s physical gold trade within 5 to
10 years.
Among the measures, the Singapore government will exempt
investment-grade gold, silver and platinum from the local goods and
services taxes (similar to VAT or sales tax), beginning October 1, 2012.
ViaMat, one of the world’s most well-known secure logistics
companies, is also doing heavy business in Singapore and Hong Kong.
ViaMat, in fact, is the security partner for such groups like
GoldMoney.com and HardAssetsAlliance.net which offer turnkey gold
storage solutions.
Private individuals can contract directly with ViaMat, though their
fees can be quite steep… so this may not make sense unless/until your
holdings exceed several hundred ounces.
For private investors with smaller holdings, a place like The Storage
in Hong Kong is a great option, especially considering how inexpensive
it is to buy gold in Hong Kong.
Simon and I have both written before that premiums on gold coins in
Hong Kong can run as little as 0.15% above spot—you can see this for
yourself at places like Hang Seng Bank and the Bank of China, both
located on Des Voeux Road.
One of the great advantages of Hong Kong as a place to buy, sell and
store gold is that there are no taxes or duties on imports or exports of
precious metals. There is no local sales tax either.
Moreover, the market for precious metals is deep and active, and no
one bats an eyelid if you walk into the bank and drop a wad of cash to
exchange for gold bullion.
Contrast this with places like the United States where cash
transactions are increasingly being viewed with major suspicion, and the
government is trying to recruit everyone from bankers to coin dealers
into being unpaid spies.
Until next time,
Tim Staermose
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