Alt Investments
UBS Chooses Singapore As Its First Gold Vault Location Outside Switzerland
UBS has followed Deutsche Bank in launching a gold vault service in Singapore, a sign of powerful demand for the yellow metal from Asian clients.
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 reflects the city-state's reputation as one of the safest and most stable countries in the world.
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.
The move comes despite a recent sharp fall in the price of the yellow metal below $1,200 per ounce, having been as high as over $1,900 per cent ounce in September 2011. The prospects of declining quantitative easing and some cooling of emerging market economies has taken some fizz out of the price.
"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.
