Family offices cheer MAS’ lifting of precious metals cap, but do not expect a gold rush

The Monetary Authority of Singapore (MAS) recently lifted the 5 per cent cap on holdings of physical precious metals for investment funds and family offices under the Section 13O and Section 13U tax-exemption schemes. This move has been welcomed by industry players, as it could potentially bolster Singapore's ambitions to become a prominent gold hub.

Prior to the cap removal, certain family offices and fund managers had to reduce their holdings in precious metals due to the tax incentive restrictions. The cap was introduced when gold prices reached a record high of around US$5,500 per ounce in January. However, since August 1, these constraints have been lifted, allowing investors to increase their precious metals holdings without worrying about the tax implications.

While the news has been received positively, it is unlikely to trigger a gold rush in Singapore. Tepid investor interest has been cited as a dampener on Vietnam's strong IPO pipeline, suggesting that market sentiment and other factors may still be influencing investment decisions.