Singapore Precious Metals Exchange – Alchemy In Singapore

“SINGAPORE: Precious metal investors now have a new platform to trade with the launch of the Singapore Precious Metals Exchange (SGPMX).
It is the world’s first precious metal exchange that is fully backed by physical precious metals.
With as little as US$1,000, investors can buy, store, transport and trade precious metals like gold and silver.
The whole process is as easy and secure as trading in other financial instruments.
SGPMX said its customer base is growing. It currently has over 10,000 customers with about 1,000 customers from Singapore and 4,000 from Japan.” Source : Channel News Asia

http://www.channelnewsasia.com/news/business/singapore/s-pore-launches-world-s/733258.html

I checked out some prices on their retail site. Not CHEAP ! Compared it to UOB Bullion (the only bank counter I know in Singapore, so far and not sure if Bank of China still does it) which is quite expensive in my opinion.

UOB BULLION VS SGPMX

https://uniservices1.uobgroup.com/secure/online_rates/gold_and_silver_prices.jsp?s_pid=HOME201205_eg_quicklnk_ql8

http://retailstore.sgpmx.com/products.html?cat=53&p=1

The 1 kg bar would be about SGD 52k each which is a 4% premium over UOB’s.

1 oz of gold at current market rate would be about USD 1,223 i.e. SGD 1,565. For 1kg which is 35.274 oz, SGD 54.79k ??? They are selling at a discount !!???

This cannot be right because I have been reading too many reports on the premium for physical gold and silver in Asia as well as the US Mint running out of stock/supply to cease sales twice this year.

http://www.reuters.com/article/2013/05/28/us-usmint-gold-resume-idUSBRE94R0PJ20130528

Liquidity

The SGPMX does not buy back the product but instead lists it on their platform when you want to sell it for other members to buy. That sounds a bit tricky and dependent on their client base.

UOB is worse. They only buy back what they sell which is now sealed in tamper proof packs. I asked them what of those I had bought in the past ? I was told only if I can produce a receipt. To their credit, UOB has tightened their bid-offer spread considerably for their bullion now quoting a spread of SGD 70 on their 1 oz coins when it used to be >SGD 100 difference in the past (from memory).

So I did some digging around and it seems that this concept of buying and storing is not that new. There are a few other operators out there offering Singapore storage Рbullionstar.com, goldsilvercentral.com.sg etc. And I found that bullionstar  quoted the most competitive bid-offer 1586-1652 for the Canadian Maple and Australian Kangaroo coins (which are sold by UOB Bullion as well).

https://www.bullionstar.com/buy/gold_coins

The Exchange

I suspect one of the main attraction of SGPMX would be the gold trading accounts besides the exchange which would be a platform for professional dealers to participate. By that I do not mean gold traders who trade the FX and futures market but rather, the dealers in physical coins and bars.

We know that the swiss ones are closing down by the dozens due to the increased scrutiny from money laundering and tax evasion concerns. Thus relocating over to the east is a good idea, and we are closer to the Chinese, Indian and Vietnamese markets.

They have stepped up to fill the void that HKMEx left when it closed its doors for business on 18 May 2013 after a 5 year scandal ridden run and their main products were gold and silver futures. The speculation is that there will be a cash injection out of mainland China investors for a potential reopening in the future.
Source : SCMP

http://www.scmp.com/news/article/1240917/hong-kong-mercantile-exchange-closes-its-doors

Gold and Silver

I know. I know. Everyone who is remotely intellectual hates gold and silver now. It is a low class investment because if we all think like Nobel laureates we cannot possibly be attracted to the base reasons for buying them.

Chart technicians hate them and even commodity guru Jim Rogers.

Jim Rogers : Gold Will Bottom When The Mystics Are In Despair (Business Insider)

Only ones left buying are the odd recalcitrant hedge fund and of course, the uneducated and uninformed.

I am just going to buy a few more coins next week, probably with UOB for counterparty risk reasons.

It is a finite commodity because alchemy has proven naught so far. Global population up 2 bio since the 70’s. Dow Jones up about 400%. Gold price up 300%. Money supply up how much ?

DJIA GOLD GLOBAL POPULATION

Just a few more coins for the kid for a rainy day like my Vietnamese friends’ parents who saw them safely to Australia 40 years ago.