Gold has long been regarded as a safe haven asset and hedge against inflation, making it an attractive investment option for investors in Singapore. With rising economic uncertainty and geopolitical tensions, demand for gold investment in Singapore has surged in recent years. Investing in gold provides portfolio diversification and can protect against market volatility. This article explores the various ways to invest in gold in Singapore and key factors to consider before buying gold.
Buy physical gold bullion in Singapore
The most direct way to invest in gold in Singapore is to buy physical gold bullion. Gold bars and coins offered by bullion dealers allow investors to own pure physical gold. Popular gold coins purchased in Singapore include Singapore gold coins issued by local refinery PAMP, Australian Kangaroo Nuggets, and Canadian Maple Leaf coins. Gold bars from established mints like PAMP Suisse and Perth Mint are also readily available. When buying, look for reputable dealers that provide certificate of authenticity. Consider secure storage options as physical gold carries risk of theft. Banks like DBS, OCBC and UOB offer gold savings accounts for safekeeping.
Invest in gold ETFs listed in Singapore
For investors preferring more liquidity and lower holding costs, investing in a gold Exchange Traded Fund (ETF) listed on the Singapore Exchange is a convenient option. SPDR Gold Shares (SGX: O87) and UOB Gold ETF (SGX: UG1U) are two popular choices tracking international gold prices. These ETFs hold physical gold bullion in vaults and issue shares that can be easily traded on the stock exchange like regular stocks. This removes the hassle of physical storage while offering exposure to gold price movements. Investors can also diversify into other precious metal ETFs like silver and platinum.
Open a gold savings account with a bank
Several banks in Singapore including UOB, OCBC, and DBS offer gold savings accounts that allow retail investors to buy and sell gold online. These accounts enable investors to invest any amount, starting from as low as $1, in gold at live market rates. The gold is stored by the bank in secure vaults locally or overseas. Account holders can sell their gold holdings and receive cash payouts easily. Some banks also offer physical gold redemption, delivery of gold bars and coins to the investor. However, bank gold accounts tend to have higher fees.
Invest in gold mining stocks
Besides physical gold and ETFs, investors can get indirect exposure to gold prices through stocks of gold mining and exploration companies listed in Singapore. As gold prices rise, gold mining firms potentially see increased revenues and profits. Examples include LionGold Corp, CNMC Goldmine Holdings, and Wilton Resources on SGX. However, investors take on additional company-specific risks. Due diligence must be done on factors like management, operations, and financial health of the miners.
Gold remains a prudent investment for Singaporeans looking to diversify and hedge their portfolios. When allocating funds to gold, investors should consider their investment objectives, risk appetite, expected returns and liquidity needs. The various options of physical gold, ETFs, bank accounts, and mining stocks each have their own pros and cons. Focus on robust demand fundamentals, geopolitical risks, production costs and interest rates which influence long-term gold price trends.