Cheap Gold Prompts New Deutsche Bank Bullion Vault in Singapore | Finance Magnates

Deutsche Bank has announced the establishment of a new custodial and vaulting service in Singapore on the back of physical gold buying in Asia. The recent plunge in the price of gold has triggered investor demand as buyers enter the market to soak up what might be the right time to buy before another rally.

The vault which is located in Singapore Freeport will be able to handle 200 tonnes of gold bullion. The move puts Deutsche Bank, a clearing member of the London Bullion Market Association in top spot as a full service provide of; hedging, financing, trading and physical distribution of precious metals.

Ronan Donohoe, Deutsche Bank’s Global Head of Metals and Dry Bulk Trading, said in a statement: “The new facility enables us to provide best-in-class precious metals storage and confirms our strategy to offer clients solutions they require to protect their wealth.”

Safe haven

In times of economic gloom gold is seen as a safe haven for investors, during the height of the economic crisis analysts at major banks expected the precious metal to reach the all important $2000 mark. Between 2008 and the metal’s record highs of around $1,920 an ounce in September 2011, the value of gold has almost tripled due to financial uncertainty, with the help of the Greek debt debacle.

The Federal Reserve’s QE3 program as well the recent bull moves in the US equity markets have put downward pressure on gold and hence the yellow metal is floating around $1400.

Singapore premier destination for gold

Singapore, one of Asia’s leading financial centres has been battling with rival Hong Kong to secure the top spot, the new vault will open up doors to new wealth in Thailand, Vietnam and Indonesia. Last year Singapore removed a tax of 7% on the sale of bullion, Finance Minister Tharman Shanmugaratnam removed the tax to make Singapore more competitive and the prefered destination in the region for physical gold.

Mr. Donohoe added: “This offering will encourage a significant development in a Singapore-based precious metals market. Holding gold in an allocated account in Singapore is an effective way of protecting your wealth against unforeseen external shocks. Given Singapore’s exceptional transportation linkages along with the International Enterprise Agency’s objective to make Singapore a global hub for gold, the establishment of Deutsche’s facility is a natural progression.”

In December (2012) the Royal Mint, supplier of gold coins in the United Kingdom, launched a new vault. Barclays and JP Morgan have also been setting up new facilities to cater for the demand in gold buying.

Mark Smallwood, head of Wealth Planning within Deutsche Asset & Wealth Management, APAC, said in the official press release: “We are seeing considerable interest on the part of our Ultra High Net Worth clients in this asset class for its well known qualities. Through this new platform, our private clients have the ability to achieve three vital objectives when seeking exposure to this asset class, namely a highly regulated and stable jurisdiction in which to custody these assets, the ability to store their gold holdings in its physical form, and finally to use their physical gold holdings as collateral against loans.”

Singapore Mercantile  Exchange  
Exchange

An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading.

An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading.
Read this Term (SMX) launched its first US dollar denominated gold contract which is based on the MCX priced in INR. The contract opens up  Arbitrage 
Arbitrage

Arbitrage is defined as the practice of taking advantage of a price difference between two or more markets.In particular, this involves the simultaneous buying and selling of securities, currencies, cryptos, or commodities in different markets. Arbitrage has the effect of causing prices of the same or very similar assets in different markets to converge over time.In order for arbitrage to occur, there must be a uniform set of conditions that need to be met. For example, the same asset does not trade at the same price on all markets, two assets with identical cash flows do not trade at the same price, and an asset with a known price in the future does not today trade at its future price discounted at the risk-free interest rate.Arbitrage in Cryptocurrency MarketsIn the cryptocurrency space, arbitrage refers exclusively to the practice of buying a crypto coin for one price on an exchange and then simultaneously selling it at a higher price on another.The profit that is earned from these temporary price differences is considered to be a risk-free venture for the investor.Arbitrage is especially prevalent on crypto exchanges given the price differences that exist. It is common for differences in crypto prices to vary by the region or where a crypto exchange is based from. For example, high Bitcoin trading volumes and accordingly high Bitcoin prices on South Korean crypto exchanges resulted in what became known as the “Kim-chi premium.” Traders who had access to exchanges in South Korea and exchanges elsewhere in the world where the price of Bitcoin was lower had the opportunity to earn arbitrage.This involved buying BTC on exchanges with lower prices and them selling them on South Korean exchanges where prices were inflated. Crypto exchanges are evolving however to control for arbitrage though opportunities for this practice are still occurring.

Arbitrage is defined as the practice of taking advantage of a price difference between two or more markets.In particular, this involves the simultaneous buying and selling of securities, currencies, cryptos, or commodities in different markets. Arbitrage has the effect of causing prices of the same or very similar assets in different markets to converge over time.In order for arbitrage to occur, there must be a uniform set of conditions that need to be met. For example, the same asset does not trade at the same price on all markets, two assets with identical cash flows do not trade at the same price, and an asset with a known price in the future does not today trade at its future price discounted at the risk-free interest rate.Arbitrage in Cryptocurrency MarketsIn the cryptocurrency space, arbitrage refers exclusively to the practice of buying a crypto coin for one price on an exchange and then simultaneously selling it at a higher price on another.The profit that is earned from these temporary price differences is considered to be a risk-free venture for the investor.Arbitrage is especially prevalent on crypto exchanges given the price differences that exist. It is common for differences in crypto prices to vary by the region or where a crypto exchange is based from. For example, high Bitcoin trading volumes and accordingly high Bitcoin prices on South Korean crypto exchanges resulted in what became known as the “Kim-chi premium.” Traders who had access to exchanges in South Korea and exchanges elsewhere in the world where the price of Bitcoin was lower had the opportunity to earn arbitrage.This involved buying BTC on exchanges with lower prices and them selling them on South Korean exchanges where prices were inflated. Crypto exchanges are evolving however to control for arbitrage though opportunities for this practice are still occurring.
Read this Term opportunities between the exchanges, in addition to new trade opportunities in INR currency futures or the NDF contract.