The stash of gold, silver and gems stored in the
vaults and safe deposit boxes of Malca-Amit in
Singapore has jumped almost 90 percent in the past year as wealthy investors
seek a refuge in a world of negative interest rates, stagnating economies and
political uncertainty.
The company’s facilities in the city-state are
about 70 percent full and more than 90 percent of the hoard comprises precious
metals.
Gold has rallied 26 percent this year and silver’s
up 37 percent as negative interest rates, the U.K. vote to leave the European
Union and the U.S. presidential race spur investors to protect their wealth.
Hedge fund tripled options bet on a bullion-backed exchange-traded fund in the
second quarter.
High net-worth individuals are looking to diversify
their portfolio into tangible assets like precious metals, precious stones.
This will preserve and protect their wealth.
The attraction of gold is in a world where central
banks are trying to revive growth by buying bonds and keeping their economies
flush with cash. Billionaire George Soros cut his holding in Barrick Gold Corp. in the second quarter, he bought shares
in the SPDR Gold Trust.
Assets in exchange-traded funds have climbed. The
amount in gold-backed ETFs has soared almost 40 percent this year and is near
the largest in three years. Holdings in silver-backed funds have climbed almost
10 percent to a record.
U.S. borrowing costs, will lift the dollar and act
as a brake on a metal that pays no interest. The probability of three rate
hikes through end-2017. While Goldman Sachs Group Inc. likes gold as a
strategic hedge, its base case is $1,300 an ounce, less than the $1,340 traded
Tuesday.
In Asia, where more than half the world’s bullion
is consumed, people have always invested in gold. In China and India, it’s part
of the culture and tradition to put some gold aside.