Singapore Gold Vaults Draw Wealthy Westerners, Holdings Surging 16-Fold
Privately held gold in Singapore has surged 16-fold over the past decade as wealthy investors from the United States, Europe and the Middle East relocate their physical gold amid spreading geopolitical conflicts, fiscal concerns and political uncertainty.According to Bloomberg on Oct. 21, Singapore-
Over the past decade, the amount of privately held gold in Singapore has skyrocketed 16 times, reaching over 800 metric tons in 2023, according to estimates by J. Rotbart & Co. This surge is largely driven by Western investors, including those from the United States, Europe, and the Middle East, who are relocating their physical gold due to geopolitical conflicts, fiscal concerns, and political uncertainty. J. Rotbart & Co. forecasts that these holdings could reach 1,400 metric tons by the following year.
Major gold vault operators in Singapore, such as Le Freeport and The Reserve, are finding it increasingly challenging to accommodate the growing demand. Le Freeport, often referred to as "Asia's Fort Knox," reported in May that most of its underground vault space, capable of holding at least 1,700 metric tons of gold, is nearly full due to a sharp increase in storage requests.
The Reserve, another significant facility, also noted a substantial rise in overseas demand - accounting for about 90% of its current holdings, which has tripled compared to early 2020.
Singapore's attractiveness as a storage location for wealth lies not only in the intrinsic value of gold but also in the country's stable governance, sound fiscal position, and strong national defense capabilities. These factors make Singapore an ideal location for storing wealth over long periods, ranging from 30 to 40 years or more.
Concerns over the U.S. fiscal deficit and political uncertainty are prompting wealthy Westerners to diversify their gold storage locations, with online inquiries from Western clients tripling in the past year.
To capitalize on this growing trend, Singapore's government and financial industry are taking steps. The Singapore Exchange plans to introduce a clearing system for over-the-counter gold transactions by the end of the year. Meanwhile, the Monetary Authority of Singapore provides gold custody services for foreign central banks and other institutions, offering tax incentives for funds investing in physical precious metals.
Major financial institutions, such as Nomura International Asset Management and Oversea-Chinese Banking Corp. (OCBC), are also strengthening their physical gold custody and related businesses to meet the rising demand from wealthy clients.
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