During challenging times, such as the current crisis, gold is a haven due to its ability to hold value when financial markets crash. The ongoing COVID-19 pandemic has proven this factor with the market selloff that has resulted from it along with the gradual rise in gold prices.
Gold also provides a hedge when market conditions are unclear. Also, during difficult times when circumstances cause the paper value of investments such as bonds and equities to decrease.
Investors within Singapore who seek to learn more about gold as a type of asset can accomplish their goals in several ways that expose them to this worthwhile asset class.
Investing In Gold In Singapore
1. Physical Gold
Buying and holding physical gold as pure gold bullion coins or gold bars is an investment method that has been around for my years. Retaining gold jewellery is also a popular approach to investing in gold.
While there may be some perceived challenges in regards to buying and selling actual gold, the benefits certainly outweigh any inconveniences that may arise.
Buying and selling gold means that it needs to be transported and sold, which is relatively easy for many people because a 1kg of gold has a value of approximately S$80,000. You also have to ensure that your gold is protected wherever you decide to store it. That could be at a bank’s safety deposit box or in a safe in your home.
When converting gold into cash, it is essential to note that pawnshops and the gold dealer will determine how much they can take your gold. In the best-case scenario, you will be able to get favourable rates.
Physical gold can be for investment at a bank such as UOB that offers gold bullion coins and gold bars.
2. Gold Certificates
Buying gold certificates allows you to exchange them for cash or physical gold. Moreover, these certificates do not have an expiry date.
Gold certificates essentially represent physical gold that is stored somewhere else. Owners of gold certificates enjoy similar benefits to owning actual gold in terms of the security and convenience that is associated with these investments.
Since you do not keep the physical gold, the certificate issuer needs to fulfil their legal obligation of handing over cash or physical gold at any time. Issuing authorities cannot sell the rights to similar physical gold to several people. It is essential to deal with legitimate entities to avoid scams.
3. Gold Savings Account
A gold savings account is comparable to gold certificates. This type of account gives you a ledger to buy and sell gold in various amounts rather than being restricted to a gold certificate’s denomination.
UOB provides gold savings accounts in Singapore with 5 grams as the minimum quantity for each transaction. There is an applicable monthly service charge based on the gold deposits in your balance.
4. Exchange Traded Funds (ETF)
Exchange-Traded Funds are also there to track gold prices, just like with ETFs that track prices of indices like stock and bonds.
Since these get traded on the exchange, investors can benefit from more transparency and liquidity without worrying about storing and keeping actual gold.
ETFs also have the advantage of enabling investors to track their holdings and gold returns along with other investments. Investors should consider the tracking error and expense ratio of each fund when determining the ETF they want to use.
Why Is Gold A Great Addition To Your Investment Portfolio?
When you have other investment options like stocks, it is still a good idea to include gold in your portfolio because it a traditional haven during an economic crisis. A timely example is the COVID-19 pandemic which has stripped many Singaporeans off their jobs.
You can anticipate the prices of stock and property to be depressed in a recession such as now. Meanwhile, gold prices always rise when there is a climate of both political and financial uncertainty. Gold holdings at this time can hedge against the decline of trade and industries.
Furthermore, gold has maintained a relatively constant purchasing power for a long time. In sharp contrast to this resilience, the SGD was able to purchase much less than what it is capable of today. That is why investing in gold serves as an effective solution for hedging against risks linked to currency. Your money might completely lose its value if the currency crashes, but your gold will still be worth a lot.
Investing in gold is a worthwhile asset class in addition to your portfolio. It can also be a great way to build your passive income.
A tip is to aim to have even more diverse investments to distribute the risk.
Looking At Historical Gold Prices
It is interesting to take a look at how gold has performed as an investment over time from the late 80s.
This way, you’ll have a better idea of how gold prices fluctuate and whether you should invest in gold.
|Year||Price (USD per oz)||Change (%)|
Buying Gold From Banks
If you wish to start investing in gold, a great way to start is to purchase them from banks.
Banks such as UOB are well known for offering gold savings accounts along with providing physical gold. However, while some banks offer buyers the option of gold bars, this is not a common occurrence. Banks that deal with buying and selling gold are more likely to offer gold coins rather than gold bars to buyers.
It is assuring to go to a bank that you are familiar with and leave with your gold bar purchase. In reality, it is becoming rare for banks to provide gold bars as most banks that sell gold stick to offering coins.
Purchasing UOB Gold in Singapore
Buying and selling gold without it getting delivered physically is a simple and hassle-free process. Especially so when you have a gold savings account. Gold holdings usually get recorded as grams with 5 grams being the minimum quantity for each transaction.
- You can carry out transactions at different UOB branches during official banking hours. You can open accounts by visiting any branch.
- The prices of gold bars depend on the international gold price duly adjusted according to the market conditions in Singapore.
- The prices of gold bullion bars consist of a premium above the international gold price.
- A flat rate of $5 gets charged for each certificate.
- People have the option of transacting online or through UOB branches.
Start Investing In Gold And Grow Your Wealth Today!
Gold has always been a precious commodity. It has been a symbol of wealth and as currency for centuries. Its long-standing value showcases stability. Investors regard gold as a safe investment that recovers its value rapidly amid economic downturns.
Gold continues to be a major consideration for investors who are looking for great investment choices that retain their prices or value, which enables the buyer to conserve wealth. Many investors consider gold to be a form of insurance that can protect them from the far-reaching effects of volatile economic situations on a global scale. Unlike money, gold has an intrinsic value attained from its limited amount and status around the world.
With The COVID-19 pandemic rendering many Singaporeans jobless, it pays to ensure that you have adequate savings to tide you through tough times. With lives lost and livelihoods affected, we must be prepared for the long lasting effects that COVID-19 can have on the Singapore economy and ourselves.
During these times, it pays to have a reliable and committed financial institution to back you up. At Credit Thirty3, we strive to help as many people as possible, financially. Our wide range of personal loans ensures that your finances are well taken care of.