Tag Archives: gold vault

Degussa Singapore Closing its Bullion Shop

Just 2 years after opening its first precious metals store in Asia, on Orchard Road in Singapore, German company Degussa GoldHandel has now surprisingly announced the imminent closure of this store.

According to the Degussa Singapore website:

Degussa Singapore will cease its retail operation at 22 Orchard on the 31 October 2017.

A Singapore branch of Degussa was opened by German company Degussa GoldHandel in October 2015 as part of its international expansion strategy, wherein it saw Singapore as a location that it regarded “as having a high growth potential for Degussa.” Degussa Goldhandel is a shortened version of Degussa Sonne / Mond Goldhandel GmbH, the full name of the German corporate parent.

Degussa operates in Singapore as “Degussa Precious Metals Asia Pte Ltd”, and is known as Degussa Singapore. Degussa Singapore had offered Degussa branded precious metals bars, a range of precious metals coins and collectibles, and storage facilities in the form of safety deposit boxes and other secure storage facilities.

Degussa GoldHandel also operates 10 bullion product stores in Germany as well as branches in Switzerland (Zurich and Geneva) and Spain (Madrid). Degussa GoldHandel also fully owns London bullion dealer Sharps Pixley in central London.

Degussa’s exit from Singapore so soon after committing to the Singaporean and wider Asian market is surprising, but may be related to its loss-making financial position. For the full year ended 31 December 2016, Degussa Precious Metal Asia Pte Ltd registered a net loss of SGD 2.8 million on revenues of SGD 59 million. At the same time, Degussa Singapore’s total liabilities exceeded total assets by SGD 4.35 million. This followed its first full financial year which ran from its date of incorporation on 20 November 2014 to 31 December 2015, a period in which Degussa Singapore made a net loss of SGD 2.05 million.

Although Degussa Singapore’s 2017 financial year results are yet to be published, it’s possible that continued financial losses at Degussa Singapore during 2017 were influential in the parent company’s decision to close its Singapore branch. Degussa Precious Metals Asia Pte Ltd (Degussa Singapore) is a wholly-owned subsidiary of Degussa Sonne/Mond Goldhandel AG, incorporated in the Canton of Zug in Switzerland, which in turn is owned by Clair AG, a holding company also incorporated in the Canton of Zug in Switzerland.

Orchard Road
Orchard Road, Singapore

Degussa Customers

Existing Degussa Singapore customers who may be concerned about where in Singapore to purchase their bullion products in future will be interested in learning that BullionStar’s precious metals store and showroom in central Singapore offers a full range of investment grade bullion bars and coins from the world’s most prestigious precious metals refineries and mints. BullionStar also buys all forms of investment grade bullion bars and bullion coins from the public, including Degussa branded precious metals bars.

Degussa Singapore customers who currently use Degussa’s safety deposit boxes or offsite storage facilities in Singapore to store their precious metals may also be interested in now considering BullionStar’s secure vaulting service as a future alternative for continued storage of their precious metals within the Singapore jurisdiction.

BullionStar's Financial Strength

In Singapore, BullionStar (BullionStar Pte Ltd) remains in a very strong financial position, and the company continues to grow strongly in terms of revenues, customer base and corporate presence. For the financial year ending 30 June 2017 (FY 2017), BullionStar recorded sales revenues totaling SGD 186.2 million, which was a 38.7% increase over corresponding revenues of SGD 134.2 million in FY 2016. BullionStar has also been profitable since inception.

BullionStar operates its precious metals shop, showroom and vault in central Singapore at 45 New Bridge Road, a convenient location adjacent to Singapore's Central Business District (CBD) and next to Clarke Quay MRT Station. BullionStar also operates a sophisticated online transactional platform and now has customers from 101 countries around the world.

Bullion Product Range and Depth

One of the peculiarities of the Degussa Singapore bullion bar range was that it only offered a limited selection of gold, silver and platinum bars, all of which were branded with the Degussa logo.

In contrast, BullionStar offers a full range / very wide selection of investment grade gold bars from the world’s most prestigious LBMA accredited refineries and mints including Swiss PAMP, Heraeus in Germany, the Perth Mint, and the Royal Canadian Mint, a full range of investment grade silver bars from leading refineries including Heraeus, PAMP, and the Royal Canadian Mint, and investment grade platinum bars from such well-known refineries as Heraeus in Germany and Valcambi in Switzerland.

In addition, customers can purchase BullionStar’s own branded 100 gram gold bars (produced by Argor-Heraeus in Switzerland), and 1 kilogram silver bars (fabricated by Heraeus in Germany). These BullionStar gold bars and silver bars have no spread between the buy and sell price.

BullionStar also stocks a very extensive precious metals coin range spanning investment grade gold coins, silver coins, and platinum coins from the world’s major mints including the Royal Canadian Mint, Royal Mint, Perth Mint, US Mint, and Austrian Mint among others.

Nearly all precious metals bars and coins in the BullionStar bullion product range are exempt from Singapore’s Goods & Services Tax (GST) since they qualify for GST exemption under the Inland Revenue Authority of Singapore (IRAS) exemptions on Investment Precious Metals (IPMs).

BullionStar also stocks a very wide range of precious metals coins and gifts in the form of numismatics, collectibles, and gold bullion jewellery.

BullionStar's Online Store

Degussa Singapore online store users will also be interested to know that BullionStar operates a sophisticated online transactional platform for buying and selling precious metals online.

This platform transparently quotes bullion product prices in Singapore Dollars, Euros, US Dollars, and Bitcoin. Opening an online account with BullionStar is a short and simple process. and payment can be made in SGD, EUR, USD and Bitcoin. Payment mechanisms are flexible, including bank transfer, cash, NETS (in Singapore Dollars), and cheque, and of course, Bitcoin. For each product on the BullionStar website, the product's price premium compared to the world gold price is displayed, as well as the product's spread between buy and sell price.

Precious metals purchased online on the BullionStar site can be delivered to a customer's home address, picked up at the BullionStar store, or else stored in BullionStar's secure vault storage facility, using the BullionStar "My Vault" storage option. As always, customers in Singapore can walk into the BullionStar shop and showroom and buy investment precious metals bars and coins, and also sell precious metals bars and coins and scrap gold to BullionStar.

New Bridge Road, Singapore
New Bridge Road, Singapore

BullionStar's Secure Storage Vault

Degussa Singapore had offered its customers safety deposit boxes facilities on site at its 22 Orchard Road location in Singapore, as well as other offsite storage facilities in Singapore.

A primary motivation for storing physical precious metals in Singapore is safety and security. There is a strong rule of law in Singapore and virtually no crime. There are strong property rights in the Singapore jurisdiction, and no reporting requirements on buying, selling, or storing precious metals. Additionally, there are no sales taxes or GST on transacting in investment grade precious metals in Singapore, nor are there any capital gains taxes. All of this means that investors currently storing their bullion in Singapore should continue to do so, and not need to face the prospect of having to have their bullion transferred for storage outside Singapore.

Customers of Degussa Singapore who currently avail of a safe deposit box at Degussa in which to store their precious metals may be interested in now availing of BullionStar's secure storage vaulting service which utilises a high security vault integrated into BullionStar's New Bridge Road facility in downtown Singapore.

All customer bullion bars and coins stored in BullionStar's secure vault are held in allocated storage, with customers at all times holding full unencumbered legal title to all their stored bullion. All BullionStar customer bullion products are handled under camera surveillance and this handling is meticulously documented. BullionStar is insured by insurance underwriter XL Insurance against all risks at full replacement value for all precious metals stored in the vault.

BullionStar employs no less than 5 levels of auditing to verify and confirm the existence of all bullion products under secure storage in its vault facilities. This includes a Live Audit Report which lists all customer owned bullion stored in the BullionStar vault, with which a customer can verify online his/her bullion in the vault by vault account number. BullionStar vault customers are also welcome to inspect their bullion via a personal customer audit on site at BullionStar's Singapore shop and showroom. BullionStar's vault auditing furthermore includes twice yearly physical auditing of all customer owned bullion by LBMA approved independent auditor Bureau Veritas.

Singapore's Retail Bullion Sector

Overall, BullionStar is a key player in the retail gold bullion sector in Singapore and has a growing presence. According to data from the World Gold Council (WGC), overall gold demand in Singapore in 2017 totalled 17.1 tonnes, slightly lower than overall gold demand of 18.1 tonnes in 2016. WGC figures also show that demand for gold bullion in Singapore in 2017 totalled 5 tonnes, down from 5.9 tonnes in 2016.

With BullionStar having sold approximately 2.3 tonnes of gold in 2016, this represents 46% of all gold bullion sold in Singapore, and 13.5% of all gold sold in Singapore over the same period.

During financial year 2017 (FY 2017), of BullionStar's total sales of SGD 186.2 million, 60.3% by value represented gold bar sales, the lion's share of which comprised 100 gram gold bars and 1 kg gold bars. By value, 12.6% represented gold coin sales, the majority of which were Gold Maples from the Royal Canadian Mint and Gold Kangaroos from the Perth Mint. Silver bar sales represented 21% of FY 2017 revenues, the majority of which were 1 kg silver bars, followed by 100 gram silver bars. Silver coins sales represented 4.6% of FY 2017 revenues, with Canadian Silver Maples being the top seller followed by Perth Mint Silver Kangaroo coins.

Conclusion

The retail bullion market in Singapore remains in robust shape despite the recent surprising closure announcement from Degussa. Clients of Degussa Singapore who have previously transacted in bullion products can rest assured that they can now access a full range of the world's foremost bullion bars and coins from BullionStar's shop and showroom in Singapore and through the BullionStar online transaction platform. Degussa storage customers who wish to retain precious metals storage facilities in Singapore can also have future piece of mind by considering the use of BullionStar's secure precious metals vaulting facilities in central Singapore.

Infographic: COMEX Gold Futures Market

This COMEX Gold Futures Market infographic guides you through the largest gold futures market in the world, COMEX.

Did you for example know that only 1 in 2500 contracts on COMEX goes to physical delivery whereas the other 2499 contracts are cash-settled? This corresponds to a delivery percentage of 0.04% of all gold contracts.

The US government claims to hold a fair bit of gold in reserves but how much is it really holding?

In this infographic you will learn more about the COMEX gold futures market considering

  • COMEX Trading Volumes
  • Fractionally Reserved Futures Trading
  • Cash-settlement of COMEX Gold Futures Contracts
  • Eligible and Registered Gold on COMEX
  • US Treasury Gold Reserves
  • Location of US Treasury Gold Reserves
  • Foreign Gold at the Federal Bank of New York
  • US Gold Mining

You can learn more about the US Gold Market at the BullionStar Gold University.

COMEX Gold Futures Market Infographic

Infographic on COMEX gold futures market, the world's largest gold futures market

To embed this infographic on your site, copy and paste the code below

Gold Vault Profiles

Many topics in the world of gold are opaque and secretive, none more so than the famed gold vaults of the world’s major central banks and their bullion banking counterparts. BullionStar Gold University is now bringing transparency to this intriguing yet under-reported area by profiling the largest and most important of these gold vaults.

According to the vault owners and the information that they divulge, these gold vaults officially store over 16,500 tonnes of gold, which is approximately half of all reported central bank gold reserve holdings. That’s also nearly 10% of all the gold ever mined in the world. This in itself makes knowledge of these vaults important.

From the labyrinthine Bank of England gold vaults storing nearly 5,000 tonnes of gold in custody for over 70 central bank customers, to the Federal Reserve Bank of New York's subterranean gold vaults housing nearly 6,000 tonnes of gold on behalf of 36 foreign central banks and the US Treasury, this BullionStar series brings together information about these vaults that has never before been documented in one place.

Where are the vaults located? Who are their customers? What type of gold bars are stored there? How are the vaults laid out? When were they constructed? These are just some of the questions covered in BullionStar’s Gold Vault series. Only on rare occasions have reporters, camera crews or other observers been allowed to access these vaults and document their layouts and contents. We have included a media section in the profiles where possible to point you to these sources.

Witnessing such large quantities of gold bars stored in one single place seems to create a profound and similar impact on the observers regardless of which vault they have visited.

“I’m speechless when exploring the Sacristy, , … you don’t see this every day” - Alberto Angel, reporter RAI, Italy

It’s quite extraordinary” - Professor Martyn Poliakoff, visiting the Bank of England vaults

you never get sick of the gold… it even puts a smile on our faces when we’re down there working with it” - Fed Vault Custodian, New York

from a purely human perspective, we could see with our own eyes a quantity of precious metal that goes beyond an ordinary perception … I must say that it arouses feelings that are difficult to explain” -   Senator Giuseppe Vacciano, Italy

Why the observers have these powerful reactions to seeing such vast quantities of gold, we can’t say for sure, perhaps it’s because gold is money par excellence and the ultimate store of wealth, and that being close to this powerful and aesthetically pleasing element invokes a timeless sense of respect and wonder.

The BullionStar Gold University vault profiles series also covers the deep underground Banque de France gold vaults in Paris. Known as ‘La Souterraine’, home to over 90% of France’s 2,435 tonnes of gold, the Paris vaults also store gold bars on behalf of the Bundesbank and the International Monetary Fund. The series also visits the Banca d’Italia’s gold vaults, "La Sacrestia Oro", under the Banca d'Italia's Palazzo Koch headquarters in Rome which hold 1,200 tonnes, or approximately half of Italy’s gold.

BullionStar Gold University also profiles the commercial gold vaults backing the London Gold Market, the London gold clearing system and the London Bullion Market Association (LBMA) system. These vaults also house the gold behind the largest Gold ETFs in the world. Learn about JP Morgan’s gold vault deep underneath a JP Morgan Chase building off Fleet Street in the City of London, as well as the massive HSBC gold vault that at one stage stored over 1,300 tonnes of gold on behalf of the SPDR Gold Trust. Is this HSBC vault in the City of London between 2 former HSBC buildings, underneath a road leading to Southwark Bridge? London’s commercial vaults also include the Malca Amit gold vault storage facility adjacent to Heathrow Airport, and the G4S gold vault, built for Deutsche Bank but now said to be leased by Chinese bank ICBC Standard Bank, following Deutsche Bank's withdrawal from the London Gold Market.

A knowledge of where these central bank and commercial vaults are located and their operating details is also critical, since, if there was ever a physical gold shortage or a crisis in the gold market, these central bank and LBMA bullion bank institutions owe it to the global financial community to prove that they are storing the gold they claim to store, in the locations they profess to store it in.