UBS has followed Deutsche Bank by launching a gold vault facility in Singapore, a move likely to stir comments on how the city-state is fast catching up with Switzerland - and may even overtake it - as a wealth hub.

UBS, the Swiss banking giant, has launched its first gold vaulting service in Singapore, in response to the growing demand for the precious metal among Asian clients. 

UBS is one of the largest suppliers of physical gold in the world, covering some 80 years of vaulting, shipping, transporting and trading experience. The decision to place the vault in Singapore to complement its Zurich vault will underscore the city-state's reputation as one of the safe jurisdiction. It also adds to media chatter that Singapore is catching up with - and may also overtake - the Alpine state as the world's leading wealth management hub in due course. 

Just last month, Deutsche Bank, another banking giant, opened a 200-tonne capacity gold storage facility in the high-security Singapore Freeport. In 2010, JP Morgan Chase, the US bank, opened a gold vault in the city-state. UBS' vault is also located at the Freeport and can hold up to 60 tonnes of gold. It is the bank's only location outside of Switzerland.

"Notwithstanding the drop in gold prices, we are still receiving queries from clients who are keen to reap the benefits of asset and geographical diversification. Gold has traditionally been sought after by investors who see physical gold as an ideal instrument to diversify their portfolio in periods of economic uncertainty," said Peter Kok, regional market manager for Singapore and Malaysia at UBS Wealth Management. 

According to the World Gold Council, the Asian market accounted for a huge bulk of global gold sales in the first quarter of 2013, with India and China responsible for 62 per cent of global jewellery demand. This represents a year-on-year growth of 15 per cent and 19 per cent, respectively. As of this writing, the price of gold is at $1,249 per ounce.