Should You Continue To Keep Your Gold In Hong Kong?

September 2, 2019

With the recent unrest and demonstrations in Hong Kong, and particularly with the impediments of the airport due to demonstrations there, we have just sent out an alert letter to clients with precious metals stored at our Hong Kong vault. We recommended that they consider changing their storage to another jurisdiction.

 

Our recommendations are based on the fact that, depending on how things evolve, it may be logistically difficult to transport precious metals out of Hong Kong in an expedient manner. However, at least at this point, that does not mean that we consider Hong Kong unsafe for long-term storage.

 

Depending on where you live and what your circumstances are, Hong Kong based safekeeping may still be suitable and the best option. Some of our clients who live in the region may still prefer Hong Kong over the storage options they might have in their respective countries.

And, to be clear, without a doubt Hong Kong’s economy has been impacted, and in our view, will continue to deteriorate over time, as the jurisdiction loses its former advantages and competitive edge to other countries and cities in the region. Clearly, Singapore, Macau and Shanghai, for instance, are currently benefitting from China’s opening up of its markets and Hong Kong’s political difficulties.

 

The SAR Government officially states that Hong Kong is heading into a recession. Local and international business communities are concerned about this, in the short-term. And, they might rightfully worry about Hong Kong’s future in the longer-term.

 

We are regularly checking on the situation. As of now, our assessment is that it is still generally safe and responsible to safekeep precious metals in Hong Kong. Despite what you may read and hear elsewhere, the rule of law is still intact, and business generally continues as usual.

 

Global Gold’s storage facilities are not located where the unrest is taking place. Our logistics have been unencumbered by the demonstrations so far. And, hopefully, the situation will be resolved peacefully over time.

 

That said, uncertainties are higher than they were. And, unless you need to have your precious metals in Hong Kong for practical or other reasons, we do recommend that you consider moving them to another location. Our top choices continue to be Switzerland and Singapore for now. New Zealand is excellent safety-wise too. However, due to the geographic location and lack of an active precious metals market, the logistical costs are high and trading liquidity is low.

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