• 9 hours U.S. Oil Production To Increase in November As Rig Count Falls
  • 11 hours Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 13 hours Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 14 hours EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 16 hours Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 17 hours Aramco Says No Plans To Shelve IPO
  • 3 days Trump Passes Iran Nuclear Deal Back to Congress
  • 3 days Texas Shutters More Coal-Fired Plants
  • 4 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 4 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 4 days Chevron Quits Australian Deepwater Oil Exploration
  • 4 days Europe Braces For End Of Iran Nuclear Deal
  • 4 days Renewable Energy Startup Powering Native American Protest Camp
  • 4 days Husky Energy Set To Restart Pipeline
  • 4 days Russia, Morocco Sign String Of Energy And Military Deals
  • 4 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 5 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 5 days India Needs Help To Boost Oil Production
  • 5 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 5 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 5 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 5 days District Judge Rules Dakota Access Can Continue Operating
  • 5 days Surprise Oil Inventory Build Shocks Markets
  • 6 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 6 days Syria’s Kurds Aim To Control Oil-Rich Areas
  • 6 days Chinese Teapots Create $5B JV To Compete With State Firms
  • 6 days Oil M&A Deals Set To Rise
  • 6 days South Sudan Tightens Oil Industry Security
  • 6 days Over 1 Million Bpd Remain Offline In Gulf Of Mexico
  • 6 days Turkmenistan To Spend $93-Billion On Oil And Gas Sector
  • 6 days Indian Hydrocarbon Projects Get $300 Billion Boost Over 10 Years
  • 7 days Record U.S. Crude Exports Squeeze North Sea Oil
  • 7 days Iraq Aims To Reopen Kirkuk-Turkey Oil Pipeline Bypassing Kurdistan
  • 7 days Supply Crunch To Lead To Oil Price Spike By 2020s, Expert Says
  • 7 days Saudi Arabia Ups November Oil Exports To 7-Million Bpd
  • 7 days Niger Delta State Looks To Break Free From Oil
  • 7 days Brazilian Conglomerate To Expand Into Renewables
  • 7 days Kurdish Independence Could Spark Civil War
  • 7 days Chevron, Total Waiting In The Wings As Shell Mulls Majnoon Exit
  • 7 days The Capital Of Coal Is Looking For Other Options
Alt Text

Who Is Leading The Gold Rush?

Two gold heavyweights have joined…

Alt Text

This Key Gold Producer Sees Its Production Slump

Africa’s second gold producer Ghana…

Alt Text

Expect Mine Closures In This Key Gold Mining Nation

Major gold mining nation South…

Increasing Demand for Gold and Platinum as Catastrophe Insurance

A precious metals note today, in honor of gold breaking $1,300/oz (briefly) this morning.

Some of the buying that's propelled gold lately is from investors who want to hold metal as currency. Having something tangible in your pocket provides insurance if another financial catastrophe descends on the world.

JP Morgan recognizes this demand. On Wednesday, JPM announced it will open its first precious metals storage vault in Asia.

The facility will be located in Singapore, near Changi Airport (just in case you want to grab your gold and fly). The stated goal is to provide precious metals storage for "corporate, institutional and retail" clients.

Some of the people using this facility will be investors from outside Asia, looking to geographically diversify their gold holdings. Many investors are leery of keeping all their gold in one basket, just in case governments get confiscatory.

Perhaps more interestingly, the new facility will allow local Asian investors to get more involved in owning physical metal. Recently, the Singapore Mercantile Exchange announced the launch of a physically-settled gold contract that will be delivered at the JP Morgan vault.

But will gold be the number one choice in Singapore? Asia has always been a little different when it comes to precious metals. Many Asians prefer platinum as "catastrophe insurance".

Look at Japan. On the Tokyo Commodity Exchange (TOCOM), open interest in gold amounts to 3.5 million ounces. Or about 5% of the 60 million ounces in open interest seen on the NYMEX exchange in New York.

With platinum, Japan's percentage of global trade is much higher. Open platinum interest on TOCOM is 840,000 ounces. This is 45% of the NYMEX open interest in platinum, which currently stands at 1.9 million ounces.

As options like the new JP Morgan Singapore vault come available to Asian investors, it will be interesting to see what metal they choose. If they follow the Japanese example, this could become an important new source of demand for both platinum and gold.

By. Dave Forest of Notela Resources




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News