Physical Gold Holdings at the Hong Kong Airport

Physical Gold Holdings at the Hong Kong Airport

Gold is one of the oldest forms of currency, used by people for several years. Although it is no longer used as currency but its importance has not diminished.

Gold has been used as a financial asset and also as a store value. People used to and still believe in keeping gold as a financial asset with the belief that even in the period of economic crisis; gold would still hold some value. Thus, it would help them in the time of crisis. Gold has been bought in physical form, and it also has been traded for its price. For this reason, the central banks keep a certain amount of gold as reserves to help them during economic slump.

Hong-Kong has emerged as an economic giant over the years. It has been growing as a business centre. It has physical gold reserves in London, which is considered a hub of metal trade. But, keeping the costs associated, and for capturing the Asian market, Hong-Kong has built its own depository on its land.

On the 2nd of September 2009, Hong-Kong unveiled its depository at the Hong-Kong International Airport, which could be used for depositing precious metals. These depositories are used for storing precious metals like gold, platinum, silver and palladium. The depository has a dimension of 340 square meters.

This depository would enhance the importance of Hong-Kong in Asia as a logistic and financial centre. It would definitely reduce the importance of the western vaults. But, for Hong-Kong, it would bring many benefits. Hong-Kong would be able to reap the benefits of the growing demand of gold and other precious metals, not only in the country but also in the whole region.

One of major benefits is that the settlement risks and the transportation costs involved would be reduced. Along with providing physical storage, it would provide settlement services to the commodity exchanges, central banks, issuers of exchange traded funds, precious metal refineries and bullion banks.

Hong-Kong is going to benefit from the growing economies in the region, such as China. This has definitely dampened the spirits of already hard-hit western economy. The Hong-Kong Monetary Authority, which is equivalent to the central bank, has also announced that it would gradually transfer its physical gold reserves from other depositories during the year.

The unveiling of the depository on the part of Hong-Kong has been very timely, because currently, gold is gaining importance due to economic crisis, especially in this region. London has been the major hub of bullion settlement and storage. With this new depository in Hong-Kong, London would lose its position. Only time would tell how much this would benefit Hong-Kong, but currently it is very excited about the prospects that it offers. India has been the clear player in the consumption of gold in Asia, and its position would also suffer from the depository in Hong-Kong.

Jack Wogon is a gold investment consultant. You can take his help to buy gold bullion. For more information about buying gold you can visit his recommended website at http://www.goldmadesimple.com/

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