Singapore’s Bid to Dominate Gold: A New Asian Hub

China spooked markets last week after it was revealed that the Central Bank of China didn’t record any increase in its gold holdings; however, China will remain a dominant player in the marketplace as the World Gold Council looks to build a new gold hub in Singapore.

Earlier this week, the WGC and the Singapore Bullion Market Association announced they are working with local stakeholders to explore developing the city-state’s role in the global gold market.

“The rapid rise of Asia as the largest source of gold buying has moved the centre of gravity of the market, and this has created an opportunity for an international gold hub in Asia,” Chen Qinghan, Central Banks and Public Policy Lead at the WGC wrote in the announcement.

In an interview with CNBC, Shaokai Fan, head of Asia-Pacific and global head of central banks, said that Singapore is poised to become a future leader in the gold market as Asian central banks see a growing need for an official gold reserve center.

Fan added that he could see a Singapore gold market rivaling other international hubs like London and New York.

The move comes as the WGC has seen a significant rise in bullion demand across Asia as consumers look to protect their wealth and purchasing power.

At the same time, Asian demand is being led by insatiable demand in China from both retail consumers and the central bank. Although the PBOC didn’t announce any increase in its gold reserves last month, it had bought gold for 18 consecutive months, which was its longest shopping spree on record.

Looking at Singapore’s gold reserves, the Monetary Authority of Singapore is the sixth biggest gold buyer so far this year. It is also the only developed market central bank to increase its gold reserves.

In an interview with Kitco News, George Milling-Stanley, Chief Gold Strategist at State Street Global Advisors, said that he expects China to continue buying gold, even if its purchases will be less consistent than this past year and a half.

Milling-Stanley also said that he expects Asian demand to continue to play a dominant role in the gold market.

“Investment demand in that part of the world, the Far East, the Middle East, India, subcontinent, and so on, has always had a major influence on the price, and the more it grows, the more influence it’s going to have,” he said. “Population growth has been fastest through the emerging markets for the 50 years I’ve looked at gold. Economic growth has been fastest in the emerging markets all the time I’ve been looking at gold. Both of those factors will dictate who takes the most gold.”

This article originally appeared on Kitco News