Diversify your Gold Investments in Singapore - Go Beyond just the Physical

When an average person thinks about investments, the first thing that comes to their mind is probably assets like real estate, stocks or bonds. However, one asset that has been around for thousands of years and is still going strong is precious metals.

Gold, in particular, has proven to be quite a lucrative investment and there is a number of ways you can invest in gold. For example, HNWIs are turning to Singapore, Asia’s precious metals hub, as the place to buy and store physical gold as part of their strategy to diversify their asset protection portfolio. And if you were thinking about investing in gold, now is a perfect time!


Gold is an investment people often resort to in times of financial or political crisis. There are a lot of factors that contribute to the rising price of gold. For example, in the first half of 2016 gold was incredibly high as investors were worried about the state of the global economy. Its value increased further in June during the Brexit vote.

The second half of 2016 saw a decrease in value as the U.S. economy was looking up and fell, even more when Donald Trump was elected president. And even though it maintained the same level throughout 2017, it has seen just a 4% increase in value in August, the largest since September last year.

However, the value is expected to increase even further as the U.S. employment report has shown weaker-than-expected results, putting a strong selling strain on the U.S. dollar index. The household debt levels keep growing and while the economy is on a slow road to recovery, it’ll be a while before we start celebrating. Furthermore, there are strong indications that the US will raise its debt-ceiling which is historically almost always followed by the rising gold price.

With the stock market being currently overvalued, gold is expected to soar as we had the chance to see in 2016. Finally, with the current geopolitical suspense and potential trade wars on the horizon, investors are bound to turn to gold. After all, there’s nothing like economic uncertainty that can boost the value of gold.

If you are interested in investing in gold, there are a number of options you can choose from. Here are the most popular ones.

Buy and store physical gold

While some investors contend that physical gold is the thing of the past, physical gold is still one of the safest investment methods. When you buy physical gold, you are buying financial security. Since there is a finite amount of this precious metal in the world, its value remains unchanged even in periods of inflation. Gold can protect you against excessive monetary creation and devaluation. That alone is reason enough to allocate a portion of your assets and invest in physical gold.

Another reason why some investors believe physical gold is an impractical asset is that it is difficult to handle and sell. And while an argument can be made that no one walks around with gold bars or coins, there are numerous storage options. For example, bullion dealers in Singapore are making the best out of the state’s physical infrastructure to develop tailor-made gold transport and storage solutions for their clients’ gold. Add to that the fact that investment grade gold is tax-free in Singapore and you’ll get a clearer image why Singapore is the go-to place for gold investment. Finally, respectable Singaporean companies like Silver Bullion offer buybacks on gold bullion, so even selling your physical gold is not an issue.

If you plan to hold the gold primarily as asset protection, meaning that you only choose to sell it as a last resort, physical gold is definitely the best choice. If you plan on short-term investments and active trading, read on below.

Invest in gold ETFs

Exchange-Traded Funds are marketable securities that track the index of gold. An ETF is a fund that owns the actual physical gold and divides the ownership between the investors through shares. The share price of ETFs trusts closely follows the price of physical gold. ETFs are the most liquid option on this list and allow investors to enter the precious metal market without having to deal with issues like storage or transportation of physical gold. Additionally, the costs of owning gold, including storage and transport, are split among a number of investors.

However, if you want to liquidate your ETFs faster you may also end up with a loss. When investing in ETFs you should try and invest for longer periods in order to avoid short-term price changes. Additionally, you are charged with a management fee, so any returns you see will be somewhat smaller compared to the increase in the price of gold. And finally, owning a gold ETF does not necessarily mean you own any actual gold and you might not have the access to the gold at all.

Open a gold bank account

Some banks allow investors to open a bank account through which you can make regular gold savings, as well as buy or sell gold at a desired time. A gold bank account offers many benefits of a traditional bank account, like online banking. However, these accounts come with inherent charges such as transactional fees and service charges.

Get a gold proxy

Another way to invest in gold is buying shares of a company dealing with gold, for example, a gold mining company. Investors choose this option as the stocks of a mining company usually increase as the price of gold increases.

However, there are numerous risks that investors who choose physical gold or ETF do not have to worry about, for example, the management. This is why getting a gold proxy is often seen as the riskiest option of the ones mentioned, as investors are exposed to equity risks and there is almost no diversification of investment.

Which to choose?

With many different options to choose from, you have to weigh the risks and rewards of each to find which one suits you best. If you are looking to protect your assets from economic fluctuations then definitely go for physical gold. But while physical gold is better for savings, ETFs are much easier to trade with and eliminate the additional charges of owning actual gold bullion.

Singapore has developed into a full-fledged precious metals trade and storage hub in Asia. It is at the center of gold flow in the region, owing to its favorable geographic position, close proximity to major gold supply centers and connection to financial centers worldwide. This makes it an outstanding option for investment in physical gold.

If you are looking for a reliable partner for investing in gold in Singapore, Silver Bullion offers various resources and incentives to get you started.