How to Buy Gold in Singapore: A Comprehensive Guide
Gold is considered one of the most reliable investments around the world. Its value has only increased over time, making it a popular choice for people looking to diversify their portfolios. Singapore, being a financial hub of Asia, has a thriving gold market. In this article, we provide a comprehensive guide to buying gold in Singapore.
Understanding the Gold Market in Singapore
Singapore is a hub for gold trading in Asia. The country has a well-regulated gold market with strict laws governing gold import, export, and sale. Since 2019, precious metals dealers, like Silver Bullion, have been required to be registered with the Singapore Ministry of Law as a "registered dealer" under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 ("PSPM Act").
It is very safe to buy physical gold bullion from and sell gold to a registered Singapore dealer, especially one with extensive customer online reviews and a long business track record.
The Singapore government has also implemented tax exemptions for investment-grade gold, making it an attractive investment option for both locals and foreigners.
Is There Sales Tax or GST When Buying Gold in Singapore?
There is no sales tax, also known as the Goods and Services Tax (GST), when buying investment-grade gold bullion in Singapore. Gold bullion, like gold bars and coins, has been exempted from GST since October 2012 by the Inland Revenue of Singapore (IRAS).
This tax exemption on investment precious metals (IPM) is part of the Singapore Government's plan to make Singapore into a precious metals trading hub in Asia.
Investment Precious Metals Tax-exemption Criteria
The precious metal must meet all of the criteria for Investment Precious Metal (IPM) outlined by IRAS:
Purity or fineness: Gold needs to be of at least 99.5% purity, silver needs to be of at least 99.9% purity and platinum needs to be of at least 99% purity.
Internationally accredited refiner: For gold and silver, the refiner must be listed in the current or former Good Delivery list of the London Bullion Market Association (LBMA). For platinum, the refiner must be listed in the current or former Good Delivery list of the London Platinum & Palladium Market (LPPM).
Quality hallmark: The precious metal should be stamped with the hallmark of a refiner in the Good Delivery list of the LBMA or LPPM. Bank-branded bars produced by LBMA or LPPM-accredited refiners would also qualify.
Not decorative or numismatic: The precious metal should be traded based on its spot price and not traded at a premium reflective of its rarity, aesthetics, or numismatic characteristics in addition to their metal content.
Given these tax-exemption criteria for investment-grade bullion in Singapore, gold jewelry, gold artifacts, and other physical gold items would still have the sales tax or GST when purchased in the country.
What is Investment-Grade Gold?
Investment grade gold refers to physical gold that meets certain standards of purity and quality, making it suitable for purchase by investors. Here are the key characteristics of investment-grade gold:
Purity: Investment grade gold typically has a high level of purity, usually .995 fine or higher. This means that the gold content is 99.5% or more, with the remaining 0.5% consisting of other metals or impurities.
Recognized Form: Investment grade gold usually comes in the form of bullion bars or coins. These forms are easily recognizable, tradable, and their value is determined primarily by their gold content and not based on their aesthetic or numismatic value.
Standard Weight: Gold bars and coins that are considered investment grade usually come in standard weights. Common weights for gold bars include 1 gram, 10 grams, 1 ounce, 100 grams, 1 kilogram, and so on. Gold coins often come in 1/10 ounce, 1/4 ounce, 1/2 ounce, and 1 ounce weights.
Minted by Recognized Entities: Investment grade gold coins and bars are typically minted or produced by recognized and reputable mints or refineries. The Good Delivery list from the London Bullion Market Association (LBMA) is a common internationally-recognized standard. This ensures the authenticity and quality of the gold.
Hallmark and Serial Number: Gold bars often come with a hallmark (a stamp indicating the producer) and a unique serial number. This provides an added level of authenticity and traceability.
Liquidity: Due to its high purity and recognized form, investment grade gold is highly liquid. This means it can be easily sold or traded in the global market at prices close to the prevailing gold spot price.
Types of Gold Available in Singapore
The international gold market is broad and diverse, allowing institutions and retail investors different options to buy gold in the form of physical gold bullion, gold ETFs (exchange-traded funds), gold jewelry, gold stocks, and gold futures.
This article will mainly cover types of gold commonly available to retail investors in Singapore, such as gold bars, gold coins, gold jewelry, and allocated digital gold.
Gold bars are one of the most popular ways of investing in physical gold in Singapore. They are available in various sizes, ranging from a few grams to a kilogram or more.
Gold bars usually have a lower premium than coins for the following reasons:
Gold bars often have less intricate designs than coins, allowing the manufacturing or minting costs to be lower.
Gold bars are often produced with higher weights than gold coins. In general, the heavier the gold bar, the lower the price premium will be, given the manufacturing economies of scale.
Within the bullion industry, there are 2 types of gold bars produced in general - minted gold bars and cast gold bars.
Minted gold bars are bullion bars that are produced with artistic motifs and sealed in well-designed blister packaging. Examples of minted gold bars include the Rosa PAMP Suisse Minted Gold Bar and the Argor-Heraeus Gold Kinebar. Gold minted bars often have higher premiums than gold cast bars of the same weight due to the higher minting costs.
Cast gold bars are bullion bars that are produced with almost no designs, emphasizing only on the weight and purity of gold in the bar. They have the same gold purity and weight as their minted counterparts and only differ by their rougher appearance. It is normal for gold cast bars to have blemishes, indentations, and scratches on the surface, given that they are present as part of the minting process. Examples of gold cast bars are the Metalor 1 kilogram gold bar and the Argor-Heraeus 100g gold cast bar.
Metalor 100g gold cast bars
Gold coins are another popular way to invest in gold in Singapore. They are available in different sizes - commonly between 1/10 oz to 1 troy ounce.
The term 'coin' also indicates that the gold coin is minted by a government mint with a legal tender face value. Private mints producing gold coins would not have a face value and are referred to as 'rounds'.
Gold coins are usually sold at a higher premium than gold bars due to their higher minting cost and lower weight. Examples of popular gold coins include the Canadian Maple Leaf Gold Coin from the Royal Canadian Mint and the Perth Mint's Australia Kangaroo Gold Coin.
Canadian Gold Maple Leaf coins
Gold jewelry is another common way of owning gold in Singapore. It is especially popular as engagement and wedding gifts. However, gold jewelry is not considered investment-grade as it does not fulfill the IPM tax-exemption criteria for gold mentioned above - jewelry has design costs that add to the overall price, they often have varying weights and purities, and they are not produced by LBMA-accredited refiners. Therefore, buying gold jewelry in Singapore will attract the sales tax or GST.
At Silver Bullion's retail store, we also sell bullion jewelry to investors interested in gold jewelry that can be consistently valued. Our bullion jewelry come in standard designs and are made of 24K pure gold, allowing them to be valued easily without the need to appraise any special designs. They are available as follows:
- 50-gram and 100-gram 24K gold necklaces (tax-free option available for the 100-gram gold necklace stored in our The Safe House vault's tax-free zone)
- 10-gram 24K gold ring
Allocated Digital Gold
Silver Bullion also offers an allocated digital option to buy gold conveniently through their S.T.A.R. Grams gold savings account, which allows gold buyers to save in gold regularly. Customers can buy gold from as little as 0.01 grams of gold at a low premium of only 2% above the gold spot price.
Unlike a gold ETF, which may be unallocated, S.T.A.R. Gold Grams is fully allocated which means that it is fully backed by physical gold stored in our vault, The Safe House.
Similarly, Silver Bullion also offers S.T.A.R. Silver Grams for investors interested in buying fully-backed digital silver.
S.T.A.R. Gold and Silver Grams
Where to Buy Gold in Singapore
There are several options for buying gold in Singapore, including banks, private dealers, and online platforms.
The only bank in Singapore that offers gold bullion for sale is United Overseas Bank (UOB). They sell investment-grade gold bars and coins at competitive prices. UOB also sells 1-kilogram gold certificates for customers who prefer not to take delivery of the physical gold.
However, the bank's opening hours limit over-the-counter purchases of physical gold. In addition, the bank's gold prices may not be refreshed as quickly as bullion dealers. Therefore, if there are significant fluctuations in the gold price, the price disparity between the bank and bullion dealers may be substantial.
An important thing to note when buying gold from UOB is that the bank will only buyback gold that it sold that is sealed in the bank's original packaging. Buyback may be refused by the bank if this packaging is damaged or opened.
Bullion dealers, like Silver Bullion, are another option for buying gold in Singapore. They offer a wide range of investment-grade gold products. It is common for Singapore bullion dealer to display their gold prices transparently on their websites, allowing customers to compare between bullion dealers, making gold prices competitive in Singapore.
Many bullion dealers also allow the online placement of orders on a 24/7 basis, where customers can submit orders online to lock their prices, giving convenience to buyers as they can buy gold bullion even beyond the bullion dealers' opening hours.
Well-established bullion dealers, like Silver Bullion, welcome the buyback of gold bullion regardless if the gold was bought from them. Silver Bullion can also buy back gold in various conditions because it has testing equipment at its retail store to authenticate the bullion.
Silver Bullion's retail store in Singapore
Ways to Store Gold in Singapore
After buying gold in Singapore, you have the following options to store gold safely.
Store Inside a Home Safe
You can buy a good safe to store gold at home without additional storage costs. However, do note that the safety of your gold is dependent on your home security. In addition, most home insurance may not cover or be insufficient if you have substantial gold holdings if they are damaged or stolen.
Store in a Safe Deposit Box
Gold is a valuable asset that needs to be stored securely. Many banks offer safe deposit box services for a fee. However, most of such safe deposit box services are uninsured since the bank does not require you to declare the contents of your safe deposit box. Obtaining your own insurance is recommended to protect against theft, loss, or damage.
Safe deposit rental fees are also typically charged annually. Should you terminate your safe deposit box rental early, your storage fees may not be pro-rated and refunded to you. Please check the terms and conditions with your safe deposit box provider.
The Safe House, Silver Bullion's vault, also offers safe deposit boxes for gold and silver storage at The Reserve. They are unique because you can insure your safe deposit box contents stored at The Safe House. This would require you to declare your bullion content prior to depositing it into your box.
The Safe House's safe deposit boxes are also sealed with a uniquely serial-numbered metal seal, which is an added security feature in addition to your safe deposit box keys. The metal seal's serial number is checked every time before you open your box or seal your box after withdrawing any items from your box.
Store in an Allocated Gold Storage Program
With a safe deposit box, you pay the same rental fee even if you put only a 100-gram gold bar in it, making it potentially costly.
An alternative is to store gold in an allocated gold storage program like Silver Bullion's S.T.A.R. Storage, which charges based on the amount of gold that you store. Storage fees for S.T.A.R Storage are also a fixed Singapore dollar-denominated rate per ounce per year. This is beneficial to customers, especially when gold prices are rising, since the storage rate remains constant regardless of the gold price.
Bullion stored under S.T.A.R. Storage is also fully insured as part of the storage fee. You will also log in at Silver Bullion's website to view your gold holding's value at any time. In addition, the authenticity of your gold is guaranteed by Silver Bullion when you store with them and your future sellback of gold is also guaranteed.
How to Buy Gold From Silver Bullion in Singapore
Buying gold from Silver Bullion in Singapore is a straightforward process. Here is a step-by-step guide to buying gold:
Sign up for an account at Silver Bullion's website. This account allows you to submit orders via the website and helps you track your past purchases.
Click on the "Checkout" button, verify your order details and select your preferred payment method in the subsequent checkout process.
At the final checkout step, submit your order to lock the price of your order. Once the order is submitted, you will need to make the payment within 2 bank days.
Head down to Silver Bullion's retail store to collect your order. If your order is already paid using a bank transfer or credit card, please bring along your NRIC or passport for identification.