Hong Kong’s Largest Bullion Vault Signals Rising Asia Wealth

Hong Kong’s largest gold-storage facility, which can hold about 22 percent of the bullion now in Fort Knox, will open in September to meet rising demand from banks and the wealthy, according to owner Malca-Amit Global Ltd. (3271)

The facility, located on the ground floor of a building within the international airport compound, has capacity for 1,000 metric tons, said Joshua Rotbart, general manager for the Hong Kong-based company’s Malca-Amit Precious Metals unit.

11-Year Rally

Immediate-delivery gold rallied from 2001 to 2011 as investors sought protection from weaker currencies and the risk of inflation, and central banks boosted holdings. The metal traded at $1,605.93 an ounce at 3:04 p.m. in Hong Kong today, 2.7 percent higher this year. It rose 10 percent in 2011. Gold held in exchange-traded funds reached a record 2,413.61 tons on July 5, according to data tracked by Bloomberg.

The U.S. Bullion Depository Fort Knox in Kentucky, held as an asset of the nation at book value of $42.22 an ounce, holds 147.3 million ounces (4,582 tons) at present, according to data on the U.S. Mint website. In total, U.S. holdings of gold amount to 8,133.5 tons, according to World Gold Council data.

China’s gross domestic product expanded 7.6 percent in the second quarter, the least in three years, a report showed on July 13. Gold demand in the country may increase 13 percent to 870 tons this year, according to a revised forecast this month from the WGC, which abandoned a target for usage to gain as much as 30 percent to 1,000 tons. Last year, demand in the world’s second-largest economy grew 20 percent to 769.8 tons.

Increasing Wealth

Asia-Pacific millionaires outnumbered those in North America for the first time last year, according to Capgemini SA and Royal Bank of Canada’s wealth-management unit. The number of individuals in the region with at least $1 million in investable assets rose 1.6 percent to 3.37 million, helped by increases in China and Indonesia, according to the firms’ World Wealth Report, released last month. So-called high-net-worth individuals in North America dropped 1.1 percent to 3.35 million.

Singapore’s Push

Singapore is also among economies in Asia vying for a greater share of the bullion trade. In February, the government announced a plan to exempt investment-grade gold, silver and platinum from a goods and services tax, starting from October. The aim is to raise the city-state’s share of the global gold trade to as much as 15 percent in five to 10 years from about 2 percent, according to IE Singapore, the external trade agency.
(Bloomberg)