JPMorgan Chase & Co. will start its first precious metals vault in Asia in the third quarter to tap increasing demand for storage.

The facility, in a tax-efficient zone in Singapore, will “accommodate the trading of physically settled futures contracts on regional exchanges,” exchange-traded fund allocations and “physically settled financing transactions” in which JPMorgan is involved, the bank said.

 

“We have seen a strong appetite from both private and institutional investors to diversify the location of their increasing gold holdings,” Blythe Masters, head of global commodities, said in the statement.

 

JPMorgan agreed to purchase some assets of RBS Sempra Commodities LLP for US$1.7 billion ($2.34 billion) in cash, including the global oil, metals and European power and gas assets, it said Feb. 16. The bank said today it expects to complete the deal later this year, pending regulatory approvals.

 

The bank’s precious metals trading business is headquartered in London, where it runs one of the largest commercial vaults outside the official banking sector, it said.