Look Out Hong Kong! Singapore Scrapping Taxes on Gold

Gold hub: Singapore to scrap tax - Indian Express

Singapore is seeking to lure bullion refiners by scrapping taxes on gold, an action that could also attract trading houses to open storage facilities and transform the country into a key Asian pricing hub, industry sources said on Monday. Singapore will exempt investment-grade gold and other precious metals from a 7% goods and services tax to spur the development of gold trading, Finance Minister Tharman Shanmugaratnam said on Friday. The change takes effect in October and may lift demand for gold bars and coins in the fourth quarter and into 2012. Singapore's investment gold demand nearly tripled to 3.5 tonnes in 2011, according to consultancy firm GFMS.
This news is going to draw attention to Singapore as a safe place to park funds. Asset managers will also very excited. The trend in the last three years is that people are moving to physical hard assets from paper.
SINGAPORE PRICING CONTRACT Singapore imports gold bars from Australia, Switzerland, Hong Kong and Japan, which are then sold to buyers in Southeast Asia and India, the world's largest gold consumer. Gold scraps from the across the region are also traded in Singapore, and this helps determine the premiums for gold bars against prices in London.
Singapore is already considered a safe destination for cash from investors in the region... and even as far out as the Middle East, an industry source said. Having the option of becoming a physical safe haven for assets like gold will only boost overall flows here. The tax changes could be the first step towards a Singapore gold contract to complement the daily fixing in London, which is widely used as the benchmark spot transaction, analyst Trevethan said.

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