The stash of gold, silver and gems stored in the vaults and safe deposit boxes of Malca-Amit Singapore Pte has jumped almost 90 percent in the past year, as wealthy investors seek a refuge in a world of negative interest rates, stagnating economies and political uncertainty.
The company’s facilities in the city-state are about 70 percent full and more than 90 percent of the hoard comprises precious metals, said Ariel Kohelet, managing director of the logistics and storage provider, without giving specific figures.
Revenue has grown at least 45 percent this year from the same period last year, he said in an interview last week.
Gold has rallied 26 percent this year and silver has risen 37 percent as negative interest rates, the UK vote to leave the EU and the US presidential race spur investors to protect their wealth.
Billionaire bond fund manager Bill Gross has said there is little choice, but gold and real estate given current bond yields, while hedge fund manager Eric Mindich almost tripled his options bet on a bullion-backed exchange-traded fund in the second quarter.
“We’re seeing a trend where high net worth individuals are looking to diversify their portfolio into tangible assets like precious metals, precious stones,” said 41-year-old Kohelet, who has been with the company for 12 years. “This is mostly to preserve and protect their wealth. They’re looking into places like Hong Kong and Singapore as places they deem to be safe.”
A raft of investors worldwide have underscored the attraction of gold in a world where central banks are trying to revive growth by buying bonds and keeping their economies flush with cash.
While billionaire George Soros cut his holding in Barrick Gold Corp in the second quarter, he bought shares in the SPDR Gold Trust.
Paul Singer, David Einhorn and Stan Druckenmiller have this year all expounded reasons for owning gold.
Some are not sure prices will keep rising, seeing more increases in US borrowing costs, which will lift the US dollar and tarnish a metal that pays no interest.
The probability of three rate hikes through the end of next year means there is little room for rallies, Pictet Wealth Management currency strategist Luc Luyet said.
While Goldman Sachs Group Inc likes gold as a strategic hedge, its base case is US$1,300 per ounce, less than the US$1,338.50 gold traded at yesterday.
In Asia, where more than half the world’s bullion is consumed, people have always invested in gold, Kohelet said.
“If you take China and India, it’s part of the culture and tradition to put some aside,” he said.
Malca-Amit has 93m2 of space at the Singapore Freeport, a free-trade zone, capable of storing 700 tonnes, while another warehouse at Singapore Changi Airport’s airfreight center has a capacity of 200 tonnes, Kohelet said.
In May, the company started a safe depository service called UltraVault and opened new facilities in the central business district, he said.
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