There is a myriad of ways to start investing in gold.
From gold rings to gold exchange-traded funds, there are so many gold-based products available to help keep you safe during market volatility and financial inflation.
But just how can you get in on gold investments?
We have put together a handy guide to take you through the best ways or formats to get investing in gold in Singapore.
Table of Contents
Gold jewelry is perhaps the easiest – and prettiest – way to begin investing in gold.
There are also lots of subcategories of gold investment products, from gold rings to earrings, bangles, necklaces, and more.
Gold jewelry items are easy to get hold of and easy to store.
Much easier than other types of gold investments or even other jewelry investments, like diamonds. Gold is also timeless and unlikely to feel dated or old-fashioned in years to come.
The value of any gold jewelry is going to remain fairly stable.
This is because the two factors that determine its value are determined by its weight and purity. These factors will not deteriorate over time.
Gold Exchange Traded Fund
The Gold Exchange Traded Fund (ETF) is a popular alternative to purchasing physical gold.
This mode of investment does not involve owning any amount of specific, tangible physical gold asset.
Nevertheless, you will have made a wise investment decision in purchasing an EFT.
Gold ETFs are traded on the stock exchange and so are highly liquid and easily accessible to all investors.
They track the changes in the price of gold on the domestic level.
Gold ETFs are a great option for gold investment if you are unable to easily invest in physical gold.
If, for example, you are finding it difficult to navigate customs rules in your destination country upon leaving Singapore, we recommend opting for an ETF.
We think that gold investors in Singapore should think about investing via ETFs in particular.
This is because, since June 2021, gold shares are traded in Singapore dollars.
This will give you more flexibility and make it easier to access gold.
This is important to increase the diversification of investment portfolios to help calm the market during times of economic uncertainty or outright downturn.
Outside jewelry, there are other ways that you can purchase physical gold. This includes gold bars and gold bullion.
Physical gold is available from gold retailers, just about everywhere in the world including Singapore. You can also purchase gold online.
If you do choose to invest in physical gold, it is important to think about where you will store it.
This gold will need space and security, not to mention logistical operations to move around.
We, therefore, recommend keeping your gold in a safety deposit box, or similar, at your local bank. This is safer, easier, and more secure than storing it at home.
Gold certificates are a common alternative to gold ETFs, with similar benefits. Acquiring a gold certificate means that you don’t need to find the correct storage for physical gold.
These certificates can be bought, and then traded for physical gold or its equivalent value in cash.
This system means that you will always have the value of gold readily available and easily accessible at all times.
Buying stocks in companies tied to gold will, from your perspective, be very similar to purchasing gold ETFs.
You will need to select the company you invest stocks in wisely. We recommend researching and finding a business that mines gold. These are most likely to be stable and are less likely to become insolvent before you can sell your shares.
Investing in gold via stocks will allow for intraday trades.
These are preferable amongst investors as they are quick and liquid. You will also find that gold stocks are easier to sell and move than physical gold.
Gold Savings Account
Still unsure in what form you would like to invest gold? A gold savings account may be for you.
This kind of savings account will allow the holder to acquire and sell gold without coming into physical contact with it.
Instead, any gold that you hold is recorded on your statements. Many of these accounts will have minimum trading or transaction amount of 5g of gold.
Other Ways To Invest In Singapore
More complex investment strategies include Gold Linked Notes (GLNs), gold options, and futures.
GLNs work in the same way as Equity Linked Notes (ELNs).
The only difference is that they operate with gold rather than shares. A GLN is a popular option with investors who wish to improve returns on their cash holdings when the price of gold is stable.
Gold options will use either physical or gold that will be mined in the future as their underlying asset.
A gold option can be separated into a call option and a put option. A gold call option will give you, the holder, the ability to purchase bullion in the future at a set price.
A put option, on the other hand, will let you sell the gold in the future at a price that has been pre-agreed as the holder.
Keep in mind that all forms of investment carry a degree of risk, even with a highly desirable commodity like gold.
Why Invest In Gold?
So now you know how to invest in gold in Singapore, you may be asking yourself why you should do it. We think there are several good reasons.
Diversification Of Your Investment Portfolio
You need to have a diverse or varied portfolio to reduce the risks that you take when you trade – never put all of your eggs in one basket!
We recommend you invest in as many different asset classes and industries as you can, including gold, so that if one asset class takes a hit you are going to have something else to rely on.
As gold is so stable and very rarely plummets dramatically, it is a safe investment to help keep your portfolio safe,
Gold has been a highly valued asset for millennia.
As such, it is almost inflation-proof. We recommend investing in gold so that you have an asset that you can easily liquidate for good value in times of high market instability or volatility. It will retain its monetary value.
Apart from anything else, gold is recognized and valued similarly across the world. This is fairly unique for an asset or investment.
Gold is an asset that you can see, feel, touch, and even taste – if you wanted to.
Being able to have an investment that is tangible, visible, and physically stored is reassuring for some and creates a feeling of safety.
Other types of investment, like stocks or cryptocurrencies, may be a little more challenging to keep track of as they do not exist on a physical level until liquidated.
Finally, many people choose to invest in gold because it holds a lot of visual appeal.
A little bit of gold will help make an item look elegant and beautiful. This is often why people choose to invest in gold jewelry, rather than ETFs or bullion.
Investing in gold in Singapore is not that much different from investing in gold around the world.
There are several different types of investment and ways to invest.
We recommend doing some research to find out what method of investment would work best for you and your portfolio.
Investors in Singapore may benefit particularly well from investing via gold ETFs.
These have been traded in both the US and Singapore dollars since June 2021, making trading easier and more accessible.
Investing in gold is wise and we recommend it to help diversify your portfolio. Gold is almost completely recession and inflation-proof, retaining its value in the future.