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BULLION INSIGHTS

Stay Updated with the Latest News, Events and Insights into Precious Metals Investment

As we near the end of Q1 2020, the Covid-19 virus outbreak continues to dominate headlines, keeping investors and the public on tenterhooks.

Financial markets have reacted with rising volatility as investment capital continues to seek out safe haven assets for refuge while waiting for clarity on full impact from the virus to play out. Governments around the world are still grappling with this crisis and are ready to introduce additional financial measures to stave off recession fears and buffer their economies. The emergency 50 basis point rate cut on March 3, 2020 by the US Federal Reserve was dramatic. It was a magnitude not seen since the Lehman Brothers collapse in 2008, and it revealed the gravity of the situation. However, pundits were quick to note that this was a health crisis and not a financial one. Rate cuts may have limited effects as cities remain in lockdown and factories remain shut. Critics have remarked that finding a vaccination cure might be more useful than a rate cut in these times.

In precious metals, gold has been the clear winner since the start of 2020. As of March 10, 2020 year-to-date, gold is up 8.7%, silver down 5.6% and platinum down 9.49%. The rise in prices has invariably caught the attention of physical gold investors in Singapore, with many donning face masks and making their way into dealerships to sell off their gold holdings at high prices. Volatile gold prices have also caught the attention of online investors looking for opportunities in gold trading to capture directional moves via trading platforms for physical deliverable gold.

In Singapore, lessons learned from SARS were put to the test as government agencies rolled out health advisories and business continuity guides to industry bodies and players to guide them on best practices. Having personal social responsibility, especially in times like these, can go a long way to stop the spread of the virus. In our office and retail store, we have implemented temperature taking and contact detail recording, and have face masks available for symptomatic clients to use. Hand sanitizers are now a permanent fixture in our retail store. Notwithstanding the challenges of Covid-19 prevention, providing liquidity for physical gold is still key for a properly functioning physical retail gold market in Singapore.

Initially, many observers were noting a casual correlation between the uptick in gold and the Covid-19 outbreak. However, the real drivers behind this rally could lie behind the combination of the full effects from interest rate cuts filtering in, disruption of global supply chain potentially leading to unseen inflationary risks, constant zero to negative yield environment and the peak gold scenario commented by analysts over the years. All of this may add up to a resurgent positive tone for the original safe haven precious metal: gold.

The revisit to 2012 price highs of US$1,702.50/oz. on March 9, 2020 has investors wondering if this is the gold bull market that everyone has been talking about and waiting for. Stay tuned to see how the markets will unfold.

Dear Valued Clients,

Due to the Covid-19 pandemic, many countries have implemented measures to limit the spread and the Singapore have just announced enhanced safe distancing measures termed as the “circuit breaker” to reduce the risk of further local transmission of COVID-19. The measures include the closure of workplace premises, retail outlets except for those necessary to support the daily living needs of the population, and limiting restaurants and food and beverage outlets to takeaway or delivery only. This will be enforced from 7th April till 4th May 2020. Circular from Singapore Government

GoldSilver Central’s physical retail store will be closed during this period but our online store and most of our products and services will still be offered and supported by my full team who will be working from home and serving you remotely. We will still be working tirelessly to secure more inventory via our relationships with refineries, sovereign mints and major dealers around the world.

GSC staff will still be able to take queries via our online chat, whatsapp, emails and phone calls during our operating hours. Please refer below for our products and services that will still be supported during this period.

Sales of physical bullion via our webstore.
Clients will be able to place orders via our web store but do note that all orders have to be fully paid within 30 minutes as physical inventory are limited. Clients will only be able to pick up your orders after the “circuit breaker” period.

For pre-orders that have been placed the past few weeks and slated to come in during the mid of April will only be available for pick up after this “circuit breaker” period. My staff will keep you updated on latest developments and feel free to contact us if you do have further queries.

GSC Live!
GSC Live! will not be affected during this period and in fact this would be a good time for clients to benefit from the volatility in the precious metals market, 24 hours, 5 days a week with minimal mark ups as compared to physical bullion during this current global squeeze due to the Covid-19 supply chain disruptions.

GSC Bullion Storage Program
Clients will still be able to transfer in or out, buy and store or sell from their holdings during this period.

GSC Savings Accumulation Program
Clients on GSAP need not worry as this program will still continue to accumulate precious metals for you throughout this period.

Perth Mint Certificate Program
PMCP will still be offered and this program is appealing during this period as clients will only need to pay 2.25% above Perth Mint spot prices to own offshore Government Guaranteed precious metals!

Buybacks
Bullion buybacks
During this period, clients will need to send us a 20% deposit before we will be able to lock in the buyback price of your bullion. Please send us an image of your bullion via email attachment or WhatsApp before confirmation of buyback prices.

Used Jewellery buybacks
Scrap jewellery buybacks will be suspended during this period as we are unable to authenticate the purity of the used jewellery.

Collateral loans
New collateral loans will be suspended during this period. Current collateral loan clients will still be able to renew, redeem or sell their holdings. Note that physical collection and physical collateral ticket can only be issued after this period.

Final note
There is no shortage of Gold or Silver in the world and the current squeeze in physical precious metals is due to the supply chain being affected by Covid-19 measures implemented globally. (Illiquid Gold prices and wide spreads, Price of physical Silver decouples from Silver spot prices & Gold stocks healthy). Hence premiums for physical precious metals have increased substantially. Clients can consider products such as Perth Mint Certificate Program, GSC savings accumulation Program and GSC Live! as these products will allow you to lock in current metal prices at minimum mark ups and narrower spreads.

Every crisis presents opportunities. How we identify opportunities and take this chance to improve and embrace change will define how we come out from the crisis. As Jack Ma likes to say, “Change is the only constant.”

Let’s also do our part and stay home. I quote the Singapore Prime Minister Mr Lee Hsien Loong, “by helping one another through this, we will prevail, and emerge stronger.” Take care and stay safe all!

Best regards,
Brian Lan
Managing Director

Latest Update on Global Shipments

Brief Update: Latest Update on Global Shipments

Tuesday, March 31, 2020
10:27 AM

https://www.reuters.com/article/us-health-coronavirus-airlines-factbox/factbox-airlines-ground-flights-count-mounting-costs-of-the-coronavirus-shock-idUSKBN21I1JD

Global airlines have grounded their fleet and more are following suit. How does this translate to precious metals markets? And probably other markets as well?

As most of us are acutely aware, there is no actual shortage of Silver in the market. It is simply a case of demand exceeds supply drastically, and with more airlines grounding their fleet, this situation does not seem to be easing anytime soon.

Physical Premiums for immediate physical delivery of precious metals has continued to increase for the past week. Most significantly, we have seen premium costs for Silver increase exponentially. Costs per oz for bars and coins have increased by more than 200.00% thus far.

That being said, GoldSilver Central Pte Ltd maintains healthy supply lines and has recently brought in Silver Precious Metals to our retail shop. More will be brought over to the retail shop in batches and clients need not worry about not being able to purchase physical precious metals if they so choose to.

Food For Thought: Covid-19 has been described as “the black swan of 2020”. And we all know that in tough times lie opportunities. The true question is, how can investors position themselves with the available tools to grasp these opportunities.

10 am GSC Reference Price

What is the 10 am GSC Reference Price? 

The 10 am GSC Reference Price is an electronic snapshot of the Gold price at 10.00 am Singapore time taken directly from our price servers. GSC also uses the reference price as a confirmed price that clients can check and refer to transparently, that was used for the dollar cost averaging for their GSC Gold Savings Accumulation Program.

 

Click here to find more about the GSC Gold Savings Accumulation Program.

https://www.goldsilvercentral.com.sg/goldsilver-central-savings-accumulation-program/

 

Are there other types of reference prices used in the Gold market

Yes, there are a few known reference prices worldwide, with the LBMA Gold Price (previously commonly known as the London Gold Fix) being the most well known in the industry. The LBMA Gold Price is now currently being administered by the ICE Benchmark Administration (IBA).

 

More information about this can be found at this link here:

http://www.lbma.org.uk/lbma-gold-price

 

The GSC Reference Price is published on GSC’s website (historical data available for download) and updated also on GSC’s Reuters page 0#PREC=GSCP.  This facilitates easy price data accessibility, transparency and provides a daily indication for Loco Singapore Gold prices.

 

Can clients use the 10am Reference Prices for their bullion purchases/sellback?

Yes you may. Please contact us to find out how can this be done.

 

Disclaimer:

In spite of GSC making every effort to ensure that the information displayed is accurate and complete, GoldSilver Central Pte Ltd is not liable for any errors, omission, inaccuracies, interruption, defect or delays in content or transmission, or for any actions taken in reliance thereon. Under no circumstance will GoldSilver Central be liable for any damages, including without limitation direct or indirect, special, incidental, punitive, or consequential damages, losses or expenses arising out of or relating to the use of the information, or decisions made by any persons or body based on the information provided therein.

In addition, GoldSilver Central Pte Ltd reserves the right to censor the Reference Price if GoldSilver Central Pte Ltd is of the view that the Reference Price was incorrectly, artificially or erroneously effected, obtained or manipulated to not truly reflect the true existing prevailing market prices at that point in time. Any edits done will be recorded with full data pre and post price snapshots disclosures with accompanying evidence to support this decision.

 

 

Illiquid Gold prices and wide spreads

Gold pricing has been very illiquid and spreads have been widening to unprecedented levels for the past 2 days. We received news from various banks and liquidity providers that the volatility and subsequent spread widening are due to a breakdown in Exchange for Physical (EFP) gold. Accordingly, refineries are shutting down and market makers who had short EFP positions are being adversely affected. Currently the Gold futures market is facing backwardation and the spot and futures prices have widen as much as $70 per oz on 24th March.

Point to note, there is no shortage of Gold in the market, just that at this point of time, demand overwhelms supply and the Gold supply chain is greatly affected due to measures announced by Governments to stem the threat of Covid-19 globally.

Read more:

https://www.reuters.com/article/us-gold-trading-cme-idUSKBN21B3GC

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