Singapore Kilobar Gold Contract set for October launch

Singapore’s exchange-traded Kilobar Gold Contract will launch on October 13, according to industry organisations.

Buying physical gold has become extremely popular across Asia, particularly over the last 10 years. The new system is designed to cater to this need and is the first wholesale 25 kilobar gold contract to be available worldwide.

Singapore’s contract is based on 99.9 per cent purity kilobars, which are freshly minted from a Singapore Bullion Market Association (SBMA) approved refinery. The bars are sealed in tamper-evident boxes that each contain 25 bars of an approved brand.

The SBMA, International Enterprise Singapore, Singapore Exchange and the World Gold Council (WGC) confirmed the start date in a media statement last week (September 29).

The four organisations have been working together to launch the contract, with the WGC stating the move is a “significant step forward” in making the country a hub for trading precious metals.

“Its introduction underpins the creation of a centralised kilobar gold market, characterised by real-time transparent price discovery, daily expiration with physical delivery and robust verification of quality gold,” the council said.

“The contract will assist global suppliers of gold to better access markets across Asia and contribute to an increasingly efficient, transparent and trusted gold market.”

Last month, the Shanghai Gold Exchange launched a new international board that opened up China’s gold markets to overseas investors.

The gold bourse began trading 11 days earlier than planned due to key officials being unable to attend the original start date. Launched in Shanghai’s free trade zone, the international board is a sign that China is also keen to boost its reputation in precious metal markets.

Singapore’s new contract adds to the region’s efforts, helping South East Asia build a solid base for gold trading.

“The contract is another significant development for Singapore following its exemption of Goods and Services Tax on investment precious metals in October 2012,” the WGC stated.

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