Interview: Silver Bullion’s Gregor GregersenBy SBMA
Silver has garnered considerable interest among retail investors in recent years, with booming demand for coins and bars that has driven a eight-year high in prices.
Benefitting from this demand is Gregor Gregersen, founder and CEO of Silver Bullion, a Singapore-based company that provides liquidity, storage and testing services for gold and silver. Silver Bullion also allows customers to pledge their bullion as collateral to borrow funds, or offer low interest loans via the storage integrated peer-to-peer lending platform.
Silver Bullion’s vaulting company, The Safe House, specialises in creating efficient, secure silver storage systems, and it is currently upgrading its facility from a leased 9,000 square foot facility to a 180,000 square foot building, which it acquired earlier this year.
Gregersen recently sat down with SBMA to share his thoughts on silver market trends and the developments at his company.
Gregersen: Silver is too bulky for traditional vaulting facilities yet too valuable to be stored in a normal warehouse. A bread loaf sized silver bar is worth S$35,000 to S$40,000 at current rates, and storing them in warehouses might not be secure enough.
Based on density and dollar value, silver requires about 100 times more space compared to gold and most vaults do not have the physical space to store silver efficiently. This lack of infrastructure means that silver is often stored at a high cost in a temporary or sub-optimal manner.
These efforts are underpinned by our belief that the demand for investment-grade bullion stored in Singapore will continue to escalate throughout this decade and we are preparing the infrastructure to fulfill and help accelerate this demand.
We acquired a new storage facility – which we call The Reserve – due to its very high floor load capacity (up to 90 kN/m2), which allows us to safely stack silver up to 12 metres high once fully renovated. In total, the building can store up to 15,000 tonnes (about 482 million troy ounces) which is about 60% of annual world production of silver.
The high floor load capacity, which is about 30 times that of a normal floor, enables cost-effective storage. The new facility’s fixed cost per tonnes of silver stored will thus be 50 times lower compared to our old facility. The facility will also feature 15 standalone UL rated class II gold vaults and specialty vaults that will be made available for third parties to lease.
In addition to its high storage capacity, our architects have created a stunning design which is likely to make The Reserve an iconic vault that will become well known throughout our industry.
The Reserve will also make extensive use of asset tracking system GramChain to digitise high-value assets such as precious metals. It will allow clients to use their bullion for loan collateralisation, tokenisation or other purposes with the greatest transparency and security possible.
Interest in silver has certainly gone up, this has been the case since the second half of 2019 until now. Silver is still valued at just over half of its all-time high price of US$49 per ounce in May 2011, making it a good value investment. For this reason, investors now see that appreciation will potentially be achieved faster when long silver as opposed to other assets.
Compared to coins, bars generally are bargains, especially cast bars whose supply is still relatively abundant. We have seen a big shift towards LBMA sized bars which now account for the vast majority of our sales.
Our customers typically view their holdings as a form of long-term wealth insurance that can withstand systemic risks, so storage and insurance are key considerations when investing in physical silver.
Investors store their bullion with us due to the transparency of our storage systems, exclusive Singapore jurisdiction, our extensive bullion testing programs and the comprehensive insurance that covers their bullion.
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