Gold Prices Hit Record High—How to Invest in Gold in Singapore (2024)

investing in gold singapore
Image: Tenor/HariPear

Guess who just broke another record? No, not Taylor Swift with her $1 billion-grossing Eras tour that may very well cross the $2 billion mark by the end of its run. And no, not the recent blisteringly hot weather that saw a 2024 high of 36.3°C in Choa Chu Kang last month. No, the most recent record-breaker is none other than: gold.

Gold hit a record high on 4 Apr 2024. In fact, bullion gold (physical gold, usually in the form of bars, that investors hold as a hedge against inflation or economic uncertainty) has been shattering records consecutively for a week now.

It’s crazy to think that gold has been traded since the 6th century BC and seems to be just as valuable (if not growing more valuable) today. Gold isn’t just for show. It also offers you a way to invest and grow your wealth. And to do so, you don’t have to cart around massive gold bars. How do you start investing in gold? Here’s a complete guide.

 

How do you invest in gold in Singapore?

There are a few main ways Singaporeans can invest in gold:

Buy physical gold

Physical gold is usually sold to investors in the form of gold bars or coins. You will have to store your shiny loot at home or in a safe deposit box at the bank. Any form of physical gold is fair game, so that gold chain around your neighbourhood ah pek’s neck can also enjoy an increase in value if gold prices rise.

While we usually see people wearing gold as jewellery, you don’t need to visit a jeweller’s to buy gold for investment. You can buy physical gold for investment purposes at banks. For instance, you can buy gold bars or gold bullion coins at UOB.

 

Buy gold certificates

Buying gold certificates is like buying physical gold, except you don’t have to cart those gold bars home. Instead, you are issued a certificate, which can usually be exchanged at any time for cash or physical gold.

At UOB, you can purchase a gold certificate for $5 with a yearly service charge of $72 per kilobar (fees are before GST). Each certificate holds up to 30 kilobars of gold, never expires, and can be exchanged for cash or physical gold if you want to get your hands on the real stuff.

 

Buy gold using a gold savings account

Some banks give you the option of opening a gold savings account, which enables you to buy and sell gold without having to deal with physical delivery.

Just like gold certificates, a gold savings account lets you buy and sell gold without having to physically manage the real thing. Your gold deposits will simply be reflected in your account balance.

OCBC offers a Precious Metals Account that allows you to buy gold seamlessly via the OCBC Digital app without the need to physically hold it. CIMB’s Gold Account and UOB’s Gold Savings Account work along a similar vein. Here are their charges and other details:

Gold savings account Fees and charges Minimum balance
UOB Gold Savings Account A service charge (subject to GST) that is the higher of:
– 0.12 grams of gold per month; or
– 0.25% p.a. on the highest gold balance recorded in your account in a month.
5 grams of gold
OCBC Precious Metals Account No sales charge or custody fee. None
CIMB Gold Account No maintenance fees and or transaction charges. None

Not all banks offer “gold accounts” dedicated to gold investment. For example, don’t be fooled by its name—Citibank’s Citigold savings account isn’t for gold investment, although it does offer up to 7.51% interest p.a..

 

Buy into gold-related ETFs or other types of funds

This works in much the same way as you would invest in stocks or other commodities through an exchange traded fund (ETF). You buy and sell your shares through a broker or online platform and don’t have to deal with the gold in its physical form.

These are some standout online brokerages, but check out our review of investment brokerages in Singapore to decide which the best one is for you.

Webull is currently the cheapest option for Singapore stocks.

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Some multi-asset ETFs, such as those you can buy with robo advisor StashAway, also include gold as one of their asset classes, together with others such as stocks and bonds.

New to investing? Check our out beginner’s guide on how to start investing in 5 easy steps!

 

Buy stocks in gold-related industries

While investing in gold-related industries isn’t exactly the same as investing in the precious metal itself, the fortunes of these industries often mirror gold prices. When gold prices soar, stock prices of gold-related industries also rise in tandem. The reverse is also true.

Gold-related companies include those involved in gold mining, gold exploration and gold production.

 

Trade futures, options, commodities and forex

If you just want to make a quick buck by trading gold rather than hold on to it as a long-term investment, you can trade gold on the futures, options, commodities and forex markets. For instance, forex traders can track the price of gold against the USD or some other currency.

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But if you’re not an experienced trader, you probably shouldn’t consider this option. Trading is riskier than investing in gold-related ETFs.

 

Why invest in gold?

Even if you have other investments such as stocks, there is a good reason to add gold to your portfolio. That’s because gold is traditionally thought of as a “safe haven” in times of economic crisis.

In a recession, you can expect stock and property prices to be depressed. Gold prices, on the other hand, tend to rise in times of economic and political uncertainty. Holding gold can thus be a way to hedge against economic downturns.

In addition, the purchasing power of gold has remained fairly constant over a long period of time, which has given rise to the phrase “the Golden Constant”. By contrast, 30 years ago, the SGD could buy a lot less than it can today. This makes investing in gold a good way to hedge against currency risk. If your currency crashes and burns, your money might become worthless, but your gold will retain its value.

Finally, investing in gold adds yet another asset class to your portfolio, which is great if you’re looking to diversify your investments further in order to spread out the risk.

 

What are historical gold prices like?

So, how has gold as an investment really performed over the last few decades? Here are historic prices of gold from 1989 onwards.

Year Price (USD/oz) % Change
1989 $401.00 -2.23%
1990 $386.20 -3.69%
1991 $353.15 -8.56%
1992 $333.00 -5.71%
1993 $391.75 17.64%
1994 $383.25 -2.17%
1995 $387.00 0.98%
1996 $369.00 -4.65%
1997 $287.05 -22.21%
1998 $288.70 0.57%
1999 $290.25 0.54%
2000 $272.65 -6.06%
2001 $276.50 1.41%
2002 $342.75 23.96%
2003 $417.24 21.74%
2004 $435.60 4.40%
2005 $513.00 17.77%
2006 $635.70 23.92%
2007 $836.75 31.59%
2008 $869.75 3.97%
2009 $1,087.50 25.04%
2010 $1,420.25 30.60%
2011 $1,531.00 7.80%
2012 $1,664.00 8.68%
2013 $1,204.50 27.6%
2014 $1,199.25 -0.4%
2015 $1,060.00 11.6%
2016 $1,145.90 8.10%
2017 $1,291.00 12.7%
2018 $1,279.00 -0.93%
2019 $1,514.75 18.4%
2020 $1,887.60 24.6%
2021 $1,805.90 -4.33%
2022 $1,813.80 0.44%
2023 $2,078.40 14.59%

And in chart form, so you can see the price fluctuations more clearly.

gold-prices-chart-2014-to-2024
Image: Gold.org, showing historic gold prices from 2014 to 2024.

As you can see from the 10-year chart, gold prices have been steadily rising since the 2010s and are at a high right now. What’s even more interesting is if we look at the movement of gold prices from 1970 to now:

gold-prices-chart-1970-to-2024
Image: Gold.org, showing historic gold prices from 1970 to 2024.

You can clearly see that gold prices started their sharp ascent around the time of the global financial crisis of 2007/2008. People who got burned during the financial crisis would have been glad if they had added gold to their portfolios earlier.

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What are some gold investing scenarios?

At the time of writing, the price of gold in USD/oz is $2,293.50.

If you had bought 10 ounces of gold in 1994, you would have paid about $3,832.50. Today, those 10 ounces would be worth $22,935! So if you’d held on to that gold till today, your investment would have yielded $19,102.50 in 30 years.

Now, let’s say you bought 10 ounces of gold 10 years ago in 2014 and held on to it till today. You would have paid $11,992.50. Today, those 10 ounces would be worth $22,935. Your investment would thus have yielded $10,942.50 in about 10 years.

It is important to note, however, that the above worked examples are just based on the price of the gold itself. In reality, your profits would have been reduced slightly by any fees paid to your bank, broker, trading platform or other service provider.

Investing in gold is really no more difficult than buying into any other ETF or fund. It’s also a tried and tested investment asset class that you should consider if you’d like to hedge risk in your portfolio.

 

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