JPMorgan (NYSE:JPM) Opens Gold Storage Facility in Singapore

JPMorgan (NYSE:JPM) has now opened its gold storage facility in Singapore, which will also store other metals as well.

Tim Wilson, JPMorgan's head of Asia marketing of global commodities said, "We've seen increasing appetite from investors and clients to diversify the location of their gold holdings and our vault facility provides an alternative site to places such as London, New York and Zurich."

"This is a significant step for us to have a direct exposure to the physical gold market in Asia," added Wilson.

Along with other metals, the storage facility will also store resources for exchange-traded funds.

The facility is located in the free trade zone at the Changi international airport.

Along with the physical settlement of transactions of JPMorgan, the facility will be available for settlement of Singapore Mercantile Exchange gold futures contracts as well.

J.P.Morgan's (NYSE:JPM) Gold Storage Facility

J.P.Morgan (NYSE:JPM) announced today it will be opening a new gold storage facility in Singapore in the latter part of 2010, built in response to growing demand from institutional and retail investors looking for a place to store their gold bullion.

A number of those holding physical gold bullion want or need multiple places to store their bullion, which a new one in Singapore will help meet those demands.

The new storage facility will also help serve the market dealing with physical settlement of futures contracts, which while including gold, will also help with other precious metals as well.

It'll also serve as a storage vault for exchange traded funds and other deals which involve physical settlement of gold or other precious metals.

China Downplaying Interest in Gold

As many following China and its acquisition of gold have noted, it has shown they are nervous about their holdings of U.S. Treasury's, and China is now attempting to spin they're not as interested in gold as they were before, seeming to attempt to shore up their interest in U.S. Treasury's, even though they are a very poor investment at this time, and will be long into the future.

More than likely it is also a nod that China may be buying gold again, but doesn't want to show its hand so prices don't skyrocket and make it more expensive to acquire.

Another problem for China is it'll have to ease off buying Treasury's slowly, as it would have a detrimental impact on their manufacturing base and exports.

China has been working up growing its domestic economy in order to not need to buy into U.S Treasury's to grow its markets.

With U.S. consumers having slowed down their spending, even if China buys Treasury's it may not be that helpful to them if Americans don't turn around and buy products from the country.

So while gold is probably the better investment taking into consideration the economic climate, China has to continue playing a balancing game until their domestic economy matures more.

Until then, gold will be better for them to invest in, but for the sake of their manufacturers and exports they'll probably be forced to buy U.S. Treasury's until that changes.

So investing in gold will continue, but it'll probably be much quieter and probably not at former levels, although it's hard to tell with the Chinese which way they'll go and how they're going to do it.

Gold ETFs Acquiring Record Tons of Gold

SPDR Gold Trust GLD.PGLD.A, also known as GLD, asserts the gold bullion it owns has risen by over 100 tons to 970.57 tons recently, which marked the largest weekly increase in the history of the gold-backed exchange-traded fund.

SPDR Gold Trust, the world's largest gold-backed ETF, said its holdings rose nearly 5percent on to record levels. Gold prices surged, implying significant buying.

Investors who are expecting years of inflation and worldwide economic volatility are pouring money into securities backed by gold bullion, helping turn what has been a safe haven into a mainstream asset class.

GLD is now the second biggest U.S. ETF, with market value of $27.5 billion, which ranks it behind only the popular SPDR S&P 500. GLD owns at this time more gold bullion than the entire government of Japan, according to the World Gold Council.

Another big gold ETF player, COMEX Gold Trust IAU.P, said its holdings also rose to a record high 70 tons.

Gold ETFs are listed on stock exchanges and offer investors exposure in bullion without having to take physical delivery. Sponsors of the funds buy a matching amount of physical gold and keep it in bank vaults.

The extraordinary rally in bullion originates from the inflationary expectation arising from the U.S. government's misguided borrowing of over $2 trillion to finance a bank rescue plan and to enact a pathetic package to stimulate the world's biggest economy in efforts to reverse a global slowdown.

While there was recent talk about a shortage of physical gold bullion as more investors turned to gold as a safe haven, that doesn't seem to be the case, as some say there are not any problems at all for gold ETF authorized dealers to acquire gold bars to create new shares.

The existing low yield of currencies and U.S. Treasury bonds because of stimulus plans by central banks made gold - which produces no interest - more attractive to investors.