Thursday, March 27, 2014

Singapore mulls physical gold trading at Southeast Asia’s biggest bourse - Wealth Managers


And India’s imports to rebound this year, billionaire jeweler says

China isn’t the only gold powerhouse in Asia. The biggest up-and-comer is recent years has been Singapore, which has taken a number of steps to bolster its position as a global precious-metals hub.
It repealed taxes on gold and silver and is home to a so-called “freeport” that warehouses the treasures of the ultra-rich. Numerous major investment banks have flocked there to build storage vaults for metals.
Now, according to Bloomberg, “Singapore Gold Exchange Ltd., Southeast Asia’s biggest bourse operator, is considering starting physical gold trading” in a plan that “would include bullion deliveries into and out of the Southeast Asian country.”
The news agency speculated that “SGX may join peers in South Korea and China in offering physical bullion trading as Asian demand increases, drawing supplies out of Europe.”
South Korea just took that step when its Korea Exchange Inc., which had only traded in bullion futures, began offering physical gold to help the government is Seoul “curb as much as $3 billion of black-market transactions.”
Black-market gold also is problem in the word’s No. 2 largest gold-consuming nation, India. Its draconian restrictions on its gold trade, aimed at reducing its trade deficit, have been under fire since their imposition. Now, with the deficit down and smuggling on the rise, speculation is growing that the curbs will be reversed soon.
That’s the viewpoint of billionaire jeweler T.S. Kalyanaraman, who thinks that “the pickup in shipments from midyear will help overseas purchases over 2014 match the 825 metric tons imported in 2013,” Bloomberg reported.
“Imports will be slow till June, and then the trend will be the opposite and we will land with the same figures as the previous year,” said his son Ramesh Kalyanaraman.
The aforementioned news from Singapore, South Korea, and India illustrates the ongoing robust demand for gold in Asia. With that part of the world boasting dynamic economies compared with the West, as well as an increasing number of millionaires, the gold trade will be increasingly dominated by Eastern nations who are absolutely ravenous for the yellow metal.
More information can be found online at http://www.goldbullionadvisors.com

Wednesday, March 26, 2014

Iraq more than doubles gold reserves with a $1.56 billion buy - Wealth Managers


Central bank purchases 36 tonnes to stabilize its dinar currency

Large-scale gold purchases by central banks have gone a long way toward supporting gold’s bull market, and bombshell news from Iraq is signaling that this trend is ongoing.
“Iraq bought 36 metric tons of gold this month valued at about $1.56 billion in the largest purchase by a nation in three years,” Bloomberg reported Tuesday. The purchase by its central bank more than doubles the nation’s bullion reserves, which stood at 29.8 tonnes in August, and stands as the largest acquisition since Mexico’s 78.5-tonne buy in 2011.
Why do central banks hold gold? “Tradition,” former Federal Reserve chief Ben Bernanke infamously told then-Rep. Ron Paul during 2011 congressional testimony. But it’s more than that. The Iraqi bank said it was diversifying into gold to stabilize its dinar currency.
Gold’s also been useful as a crisis hedge. “Central banks had been net sellers of gold until the financial crisis that followed the collapse of Lehman Brothers, which boosted bullion’s appeal as a reserve asset and hedge against currency market volatility,” Reuters noted.
Central-bank gold purchases peaked at 544 tonnes in 2012, but the World Gold Council thinks countries will continue buying amounts in the “hundreds” of tonnes. It might only take another crisis to goad central banks back into buying at record levels.
In the meantime, even if they’re not buying new gold, neither are they selling what they’ve already acquired. Iraq has no plans to sell metal, said the director general of investments at its central bank in January.
The Wall Street Journal confirmed the trend in a recent article, reporting that “over the past five years central bank gold sales have decreased significantly. Instead, central banks around the globe have increased their holdings in the aftermath of the financial crisis.”
“We’re not selling any gold,” Deutsche Bundesbank board member Carl-Ludwig Thiele told the paper.
Given the geopolitical and economic uncertainties that remain in the world, investors should do likewise and maintain a position in gold, and if they lack one, consider establishing a foothold in the yellow metal by dollar-cost-averaging or buying the dips. Be your own private central bank.

More information can be found online at http://www.goldbullionadvisors.com