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Singapore Global Gold Hub Cometh - Launches Kilo Bar Contract And Gold ATMs

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Singapore Becoming Global Gold Hub - Launches Kilo Bar Contract And Gold ATMs

Singapore continues its push to be a global gold hub. The new exchange traded Singapore kilobar gold contract will launch in less than two weeks - on October 13. The new contract is a 1 kilogramme physically deliverable gold contract for the Asian and global wholesale gold market.


Launching of SGX Gold Futures Contract: (from left) Harshika Patel, Managing Director, JP Morgan; Sunil Kashyap, Managing Director, Bank of Nova Scotia; Aram Shishmaniam, CEO, World Gold Council; Ng Cheng Thye, President, Singapore Bullion Market Association; Seah Moon Ming, Chairman, International Enterprise (IE) Singapore; Muthukrishnan Ramaswami, President, Singapore Exchange; Philip Hurley, CEO (South East Asia), Standard Merchant Bank; Jeremy East, Managing Director (Global Head of Metal Trading), Standard Chartered Bank.

In a joint statement, International Enterprise (IE) Singapore, Singapore Bullion Market Association (SBMA), Singapore Exchange (SGX) and the World Gold Council, announced the new contract yesterday.

The contract will be traded on SGX, the first wholesale 25 kilobar gold contract to be offered globally, and this is a collaboration among the four parties. The SGX is Singapore’s securities and derivatives exchange and clearing and depository provider.

This caters to the very high demand for physical gold in China and throughout Asia, which has increased significantly over the last decade.

This new gold contract differs from others in that as well as acting as a price discovery benchmark for 1kg gold bars in the Asian region, it has been specifically designed to actually deliver gold to large buyers, wholesalers and institutions, presumably including central banks.

Settlement of the contract is in gold 1kg bars and not in cash. A 1kg gold bar is 32.15 troy ounces.


The Singapore contract will be in lots of 25 kilogrammes and denominated in U.S. dollars. It will trade for three hours in the Singapore morning time. Singapore is 7 hours ahead of London and 12 hours ahead of New York, and 2.5 hours ahead of the Indian market, but is in the same time zone as both Hong Kong and Shanghai.


Six consecutive daily contracts will trade at the same time, so when one contract expires, another will be added.


Physical settlement is two days after trade date and consists of 99.99 purity 1 kilogramme gold bars that meet the approval of the Singapore Bullion Market Association (SBMA) good delivery list . This means that wholesalers will be able to gauge demand and supply of 1 kg bars over the following week.

Some analysts have said that the protests in Hong Kong and the uncertain political outlook in Hong Kong may give Singapore an advantage in terms of becoming Asia and possibly the world’s global gold hub.

Separately, the first gold-dispensing automated teller machine in Asia have been launched in Singapore. The two ATMs are in Marina Bay Sands and Resorts World Sentosa hotels.

Launched by Asia Gold ATM, Singapore is the fourth country to have the facility, next to the UAE, the UK and the US. Items such as 1g to 10g pure gold bars, as well as customised gold coins, can be bought from the machine.

Last Wednesday, the day the machines were unveiled to the public, a one gram pendant sold for $100 while it was $660 for a 10 gramme. The items can be paid through credit card or cash. Gold will be sold at different prices daily, based on the day's global prices.


The ATMs mean little or nothing with regards to Singapore becoming a global gold hub. However, they show how gold is respected and sought after in Singapore and the people and institutions of Singapore, have a significant cultural affinity with gold.

Unlike in the west, where people who believe in using gold for wealth preservation or for saving are sometimes called names and dismissively called “gold bugs”.

Gold and money, throughout history has flowed to where it is better treated. Today, gold continues to flow from West to East. A sign of shifting economic fortunes.




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Wed, 10/01/2014 - 11:36 | 5275388 Frankly Speaking
Frankly Speaking's picture

My respect for Faber and Obyrne just dropped a couple of notches. No challenge as to the proponents of this new platform or it's pricing mechanism. What is the point of this article?

Wed, 10/01/2014 - 10:42 | 5275096 Frankly Speaking
Frankly Speaking's picture

JPM, Bank of Nova Scotia, Standard Chartered Bank? Sure, I have a lot of hope for this new and non manipulated gold source.

" It will trade for three hours Singapore morning time ". Funny, where I'm from there are 24 hours in each day.

What of the other 21 hours. Same old paper game to close each day's trading session?

Sorry, not sold on it's merits. Just my opinion.

Wed, 10/01/2014 - 11:10 | 5275255 SAT 800
SAT 800's picture

Well, since we have decided that gold is an old and outmoded relic of a previous time, I suppose the Chinese are just being kind to hold on to it for us. I'm sure everything will work out just peachy-keen.

Wed, 10/01/2014 - 10:38 | 5275073 NoTTD
NoTTD's picture

Again, why trust an organization that has one of the most infamous manipulators, JPM, in the picture with it?   Its rep is standing right there, for Christ's sake.  What makes anyone think this will be a legitimate price discovery mechanism?  That JPM rep's job it going to be to keep the price in line with NY and London.  So, fuck this.

 

How long, oh Lord, must we be a voice crying in the wilderness?

Wed, 10/01/2014 - 05:02 | 5274153 Graabein
Graabein's picture

$660 for 10g?? That comes out to around $2000 per oz. Banks robbing the guy on the street. That or I'm suddenly very happy about the value of my physical

Wed, 10/01/2014 - 11:06 | 5275233 Frankly Speaking
Frankly Speaking's picture

I'm with you friend. Seems like a means of selling the muppets highly marked up gold while preserving the daily manipulation game.

Wed, 10/01/2014 - 01:17 | 5273970 Spungo
Spungo's picture

I was going to joke about how easy it would be to jack a gold ATM, but then again that's true of cash ones as well. I'm surprised cash machines don't get jacked more often. It's probably quite easy to do as long as the guys doing it are wearing matching coveralls. I know that people rarely pay attention to the guy screwing with the coke machine. Is he supposed to be taking that money, or is he stealing from the coke machine? Nobody knows, nobody cares. You can do pretty much anything as long as you're wearing something resembling a uniform.

Wed, 10/01/2014 - 06:36 | 5274235 conscious being
conscious being's picture

Guys from Central Services.

Tue, 09/30/2014 - 21:33 | 5273395 theyjustcantstop
theyjustcantstop's picture

you lost me at jpm, and derivatives.

Tue, 09/30/2014 - 22:39 | 5273637 Agstacker
Agstacker's picture

Stop, just stop.  You had me at gold.

Wed, 10/01/2014 - 05:58 | 5274194 Squid-puppets a...
Squid-puppets a-go-go's picture

this is very encouraging - delivery only contract - it means that asia is totally serious about killing the paper leverage, and not, as many of us feared, that it merely wanted to be a competitor in the price suppression scheme

Tue, 09/30/2014 - 21:03 | 5273264 buttmint
buttmint's picture

Neal Stephenson predicted all this Singapore as asset hub a decade + ago in "Cryptonicon."

And that Google already has in place an entirely spare backup 'Net waiting in the wings, all fiber-op

Wed, 10/01/2014 - 06:27 | 5274219 conscious being
conscious being's picture

Exactly.

Tue, 09/30/2014 - 20:04 | 5273010 Consuelo
Consuelo's picture

No need to worry about 'same 'ole shit, different day' in Singapore.  The rubber meets the road in the South and East China sea, where already stretched (but never faint on arrogance), U.S. foreign policy (read: The Wolfowitz Doctrine - and Brzezinski too), continues to push its weight around in a desperate and dying search for someone to take the first swing.

Wed, 10/01/2014 - 06:26 | 5274215 conscious being
conscious being's picture

I hope hou are right Consuelo. The thing is, there is a competition going on for the Asian hub for this trade. USA would prefer Singapore over Hong Kong or Shanghai as they probably figure that any shennannigans they wish to pull will be easier to get away with in Singapore. Hence the timing of the "Chinese Spring" in Hong Kong.

Tue, 09/30/2014 - 19:13 | 5272793 SimplePrinciple
SimplePrinciple's picture

Occupy Singapore!

Tue, 09/30/2014 - 19:07 | 5272772 RaceToTheBottom
RaceToTheBottom's picture

I want to be an ATM repairman in Singapore

Tue, 09/30/2014 - 18:41 | 5272693 Quaderratic Probing
Quaderratic Probing's picture

The SGX is Singapore’s securities and derivatives exchange and clearing and depository provider.

Gold will be sold at different prices daily, based on the day's global prices.

New day same game....move along

Tue, 09/30/2014 - 19:33 | 5272875 messymerry
messymerry's picture

So Quad, I take it you think the Asians will be complicit in the current manipulation scheme???  Wouldn't it be in Asia's interest to have some sort of transparent price discovery?  Why do you think they will play along?

Wed, 10/01/2014 - 05:47 | 5274178 Global Observer
Global Observer's picture

Asians buy gold to keep it, not to sell it except under dire circumstances. So it is in their interests to see the prices of gold being low. They have no interest in seeing the price of gold go up as long it is flowing into Asia. Once the inflows stop, they may want to see gold reach its fair market price, but not before then.

Wed, 10/01/2014 - 11:43 | 5275431 SAT 800
SAT 800's picture

And we have to resist the appreciation in price; in so far as possible; if we try to throttle or control their buying spree; they can respond by allowing the price to rise; Strategically, they have the power. We can just keep transferring the outmoded relic to them; physically; very physically, to reside in their vaults; in till we wake up; at which time we'll discover they have control over us. I suppose we could just strut around and shit on the "Go" board, and declare victory; but no one will be listening.

Wed, 10/01/2014 - 09:33 | 5274711 messymerry
messymerry's picture

Good discussion you guys.  I don't think the Asians really want any more of our dollars.  Actually, I think we have very little that they want now that they have sucked our universities dry. 

Price discovery will begin when they deem their coffers full...

Wed, 10/01/2014 - 11:52 | 5275472 SAT 800
SAT 800's picture

Or when ours are too empty to put up an effective defense.

Tue, 09/30/2014 - 20:14 | 5273038 Quaderratic Probing
Quaderratic Probing's picture

You have to understand that they will become billionaires by playing along.

Be a good bunch of fellas and we will reward you, protect you and allow you to move in the inner circle.

Wealth and power....

Never underestimate the other guys greed.

The gold they will sell is a standing market because people there don't trust banks. They are tapping it while its hot

Take a long look at the people in the picture. They did not go there to cave in they went there to bring them into the fold.

Price will not be set there.

No differerent than diamonds....

Wed, 10/01/2014 - 03:06 | 5274078 Squid-puppets a...
Squid-puppets a-go-go's picture

Quad, i think ur mistaken. The asians are smart enough to realise that there is a historic opportunity through gold to BECOME the inner circle. Why would they want to join the sinking ship of the west's inner circle? they have a better, more prosperous and power-transferring option

Wed, 10/01/2014 - 06:18 | 5274209 conscious being
conscious being's picture

Re.

Why would they want to join the sinking ship of the west's inner circle?

>Good question. The answer is, Singapore joined a while ago. Look at who trains their military. They are dependant on open sea lanes, hence alignment with the USN.

Even so, if there is true price discovery and physical delivery, that's exciting.

Tue, 09/30/2014 - 21:11 | 5273298 10mm
10mm's picture

Yeah. Nice picture of one foot on the bananna peel.

Tue, 09/30/2014 - 18:40 | 5272687 Al Huxley
Al Huxley's picture

So how are the Singapore traders and brokers going to pay their homage to their masters at the BIS and the European banks?  I mean, will the BIS pay for their travel to Switzerland and Brussels, or will they just have some kind of point system where BIS members are entitled to a certain number of blowjobs from the Singapore crew whenever they happen to be in Singapore, sort of like frequent flyer miles?

Wed, 10/01/2014 - 11:46 | 5275446 SAT 800
SAT 800's picture

You mean those who have the temporary 'appearance' of masters ? The Golden Rule; he who has the Gold, makes the Rules.

Tue, 09/30/2014 - 19:24 | 5272831 FieldingMellish
FieldingMellish's picture

BIS knows where their families live.

Tue, 09/30/2014 - 21:10 | 5273291 Al Huxley
Al Huxley's picture

I was just thinking the logistics - I'm assuming the Singapore traders are obligated to perform a certain number-per-month of humiliating acts of degradation for the pleasure and entertainment of the BIS guys and just wasn't sure how that works with them being in Singapore and all.  It didn't occur to me that their family members would be part of the deal, but you're probably right.

Tue, 09/30/2014 - 18:34 | 5272677 spinone
spinone's picture

shift to the east

Wed, 10/01/2014 - 11:29 | 5275330 SAT 800
SAT 800's picture

shift to over in the Browning Box, top hole in the main and put the pedal down;listen to that turbo whine; get with the program or be a bug on the windshield. The Chinese don't play silly buggers when it comes to business.

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