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Hong Kong’s Largest Bullion Vault Signals Rising Asia Wealth
Hong Kong’s largest gold-
facility, which can hold about 22 percent of the bullion now in Fort Knox, will open
September to meet rising demand from banks and the wealthy, according
owner Malca-Amit Global Ltd. (3271)
The facility, located
the ground floor of a building within the international airport compound, has capacity
1,000 metric tons, said Joshua Rotbart, general manager for the Hong Kong-
company’s Malca-Amit Precious Metals unit. Two of the vaults may
assets, including gold, for banks and financial institutions, and
will be used for diamonds, jewelry, fine art and precious metals, said Rotbart.
The move in Hong Kong reflects increased demand
gold in Asia even as the commodity struggles to sustain its rally
a 12th year. Gold-demand growth in China, the world’s second-largest user after India last year,
slowing, according to the World Gold Council. Vault charges will depend
each customer’s operations, according to Rotbart, who declined to
a figure for the venture’s cost beyond millions of dollars.
“Hong Kong is a very important center
gold, especially because it acts as a doorway to China,” said Sunil Kashyap, head
Asia-Pacific foreign exchange and precious metals
Scotiabank. “Current international hubs are in New York, Zurich and London. There’s still a need to set
an Asian hub for physical gold. The trend is for more people to look
storage and trading in Asia, when it comes to physical metal.”
11-Year Rally
Immediate-delivery gold rallied
2001 to 2011 as investors sought protection from weaker currencies and the risk
inflation, and central banks boosted holdings. The metal traded
$1,604.15 an ounce at 10:20 a.m. in Hong Kong today, 2.6 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,
to data tracked by Bloomberg.
The U.S. Bullion Depository Fort Knox
Kentucky, held as an asset of the nation at book
of $42.22 an ounce, holds 147.3 million ounces (4,582 tons)
present, according to data on the U.S. Mint website. In
, U.S. holdings of gold amount to 8,133.5 tons, according to World Gold Council data.
“The general trend is
moving the assets from the West to the East,” said Rotbart, who
oversees business development and marketing of the company’s vault
the Singapore FreePort. “Proximity to China is very important.”
China’s gross domestic product expanded 7.6 percent in the second quarter, the least in three years, a report showed
July 13. Gold demand in the country may increase 13 percent to 870 tons this year, according to a revised forecast this month
the WGC, which abandoned a target
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
769.8 tons.
Adapted and abridged from: Bloomberg, July 26, 2012.
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