Not far from Singapore airport, The Reserve - one of six gold storage facilities - is surrounded by agate and heavily guarded. Behind its sturdy steel doors are about $1.5 billion worth of gold and silver bars. Inside are a series of private vaults and a towering vault with thousands of safes three stories high.
Gregor Gregersen, founder of The Reserve, said that from the beginning of the year to April 2025, this precious metals warehouse received an 88% increase in orders for gold and silver storage compared to the same period in 2024.
The Reserve also sells gold and silver bullion, recording a 200% jump in precious metals sales compared to the same period last year.
According to Gregersen, storing physical gold in safe haven jurisdictions like Singapore is becoming a trend. Ninety percent of new orders come from outside Singapore.
Why do the super rich prefer physical gold?
The wealthy are increasingly choosing physical gold bars over "paper gold" (gold invested in certificates or ETFs) because they do not want to face too much geopolitical risk, Mr. Gregersen said.
While not completely eliminating price risk, physical gold helps avoid many of the uncertainties that “paper” gold brings.
Nicky Shiels, Head of Metals Research and Strategy at MKS Pamp, said counterparty risk would be lower if the asset were owned directly.
After the Silicon Valley Bank crisis in 2023, many investors turned to physical gold holdings or asset allocation by holding actual gold bullion in safe vaults, rather than relying on paper requirements or owning only a portion of the general reserve fund - which could be risky if a bank fails.
“Singapore is considered the ‘Geneva of the East’; it has a reputation as a safe jurisdiction with relative political and economic stability,” Ms Shiels said.
The Southeast Asian nation's role as a key transit hub makes it convenient for the wealthy to deposit gold.
This is especially true for those worried about the health of the global financial system, said John Reade, strategist at the World Gold Council.
“Some physical precious metals holders are wary of storing gold in the banking system, even in an allocated form, so they prefer to keep gold with non-bank entities,” said Reade.
Lack of trust in some local banks is also a major driver. Jeremy Savory, founder of Millionaire Migrants, a Dubai-based consultancy, said the world’s super-rich are trying to move physical gold to vaults in Switzerland, Singapore and Dubai.
However, gold stored in vaults may be less attractive to short-term investors, as the transaction costs to buy and move physical gold are higher than paper gold.
Gold prices have soared in recent months, hitting record highs. Although they have cooled, some market observers believe that gold prices could rise to as high as $5,000 an ounce next year.
(According to CNBC)
Source: https://vietnamnet.vn/gioi-sieu-giau-chuyen-kho-bau-vang-do-ve-singapore-2405575.html
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