There are several ways to invest in gold in Singapore- where you invest depends on the form of gold you’re looking for, whether it’s physical gold, gold certificates, Gold Exchange Traded Fund (ETF), or another form.
Each method of investing in gold in Singapore has its pros and cons, so the first thing you need to know is which method suits you.
There are a lot of factors that will go into this decision: do you want to own physical gold, or would you rather own something that represents gold? How much gold will you be trading, small amounts or large amounts?
The following will break down each method of investing in gold in Singapore, including where to invest for each method.
Why Buy Gold In Singapore?
For many investors, Singapore is by far the most popular choice when it comes to buying, storing, and selling gold. Across Asia, gold is valued highly, and Singapore is the region’s hub for trading gold.
There’s a number of reasons why Singapore is the best place to buy gold. Its geographical location makes it accessible from almost anywhere in the world, and flights within the region tend to be very affordable.
Corruption in Singapore is among the lowest worldwide, so you can be safe in the knowledge that the gold you’re investing in is secure. Transparency International ranked it number 7 on its Corruption Perception Index, which beats nations like the United Kingdom, Canada, and Germany.
The structure of taxation in Singapore also encourages investments in gold, as a means to maintain their position as Asia’s hub of precious metals trading.
A lot of investment-grade precious metals can be imported and sold in Singapore free of tax. Singapore’s physical infrastructure allows them to meet the high demand for gold bullion, and their finance technology companies are some of the most innovative in the world.
How To Invest In Gold / Where To Invest In Gold In Singapore
There are a number of ways to invest in gold in Singapore, whether you want to own physical gold or just something that represents physical gold.
Invest In Physical Gold
Whether you’re looking for gold bars, gold jewelry, or gold bullion coins, Singapore is the best region for investing. There are a number of places you can buy physical gold: jewelry stores, gold retailers, banks, pawnshops, or brokerages.
While you might be tempted to go the traditional route and store physical gold, it’s worth noting that all precious metals can attract thieves.
To store it securely you’re going to need either a third-party facility, which can be pricey or to build your own safe space. It’s up to you whether you deem these additional expenses worth it when there are so many other ways to invest in gold.
Be sure to research the prices of gold before you buy, because UOB (United Overseas Bank) prices can differ from other gold sellers.
Invest In Gold On The Stock Market
One alternative to buying physical gold is investing in gold on the stock market. This involves buying stocks in gold-related companies, like gold mining companies.
Similarly, you can invest in Gold Exchange Traded Funds (ETF), whose value is determined by the physical gold that it holds. This means that rather than actually buying gold, you’re investing in the gold industry and the performance of this industry.
While it’s certainly handy to be able to buy gold without actually buying gold, it does mean you face the risks that are always faced when trading on the stock market.
These risks include the company you’re investing in going bankrupt, market volatility, and actually losing your investment.
When it comes to buying units in Gold Exchange Traded Funds, you’ll be tracking the price of the gold itself. Some of the biggest gold ETFs that are listed on the Singapore Exchange (SGX) include the SPDR Gold Trust ETF, CNMC Goldmine Holdings, the Wilton Resources Corporation, and Anchor Resources. But there are dozens more companies listed on the stock exchange.
Invest In Gold Certificates
A gold certificate is essentially a substitute for physical gold, and can at any time be exchanged for either real gold or cash. It acts as proof that you own physical gold- you just don’t store it.
Buying gold certificates tends to be the method of trading gold that involves the least hassle, especially since they won’t require any additional protection. You can usually buy gold certificates at your bank.
Invest In Gold Futures / Gold Options
Investing in gold futures means you’ll be exchanging gold for a set price on a set date in the future, regardless of the market price on said date. Whether the settlement is through cash or physical gold, you’ll be obligated to make the trade.
There are two gold futures contracts listed in Singapore: the Singapore Exchange (SGX) contract, and the ICE Futures Singapore contract.
Gold options are similar- their only main difference is that while the investor has the right to buy or sell the asset at a set price within a set time period, they are not obliged to do so.
There are two types of options. Call options mean the holder has the right to buy the gold, and put options mean the holder has the right to sell. Put in the simplest terms, a call option is essentially a down payment on a future purchase.
Invest In A Gold Savings Account
Investing in a gold savings account is similar to buying gold certificates, in that you’ll be trading gold as a ledger, rather than having to receive and store physical gold. Your gold holdings will be reflected as grams in your account balance.
The easiest way to open a gold savings account is via a UOB branch. With UOB Personal Internet Banking you can quickly buy and sell gold online.
How To Decide Where To Buy Gold In Singapore
There are a number of factors to consider when deciding where to buy gold in Singapore. You’ll need to think about the location, because while there are multiple gold dealers in the region, it may not be feasible for you to buy gold physically from all of them.
It might be more convenient to buy gold online, just so long as you can ensure that the seller is a reputable one.
Another factor to consider is the production methods of the gold you’re investing in. Is the gold refined? Was it produced by an established manufacturer? Is it even gold?
You must also be aware of the fine print when it comes to buying gold, as some dealers will charge extortionate fees. You’ll usually be paying a commission fee at the very least, as well as an assay fee (to cover the process of checking the gold’s purity and authenticity).
Remember to compare the price offered by a dealer to the price of gold in Singapore.
It’s also important to know just how your gold is going to be delivered, whether it’ll be transported to you or to your designated storage space. You should be thinking about insurance, in case anything goes wrong while it’s being transported.
Trading Gold VS Investing In Gold
There are some differences between trading gold and investing in gold. You’ll want to be trading in gold if you’re looking to speculate on the price of gold (whether it’s rising or falling), for leveraging your exposure, for taking short term positions on gold, for hedging your portfolio, and if you’re eager to trade without actually owning the physical asset.
You should be investing in gold stocks (or similar trading) if you want to buy tax-free stocks and shares, if you’re eager for long term growth, if you’re focused on diversifying your investments portfolio, if you’d like to have ownership over your underlying asset (in this instance, gold), and if you want to have voting rights, as well as dividends (if the gold is paid out).
Frequently Asked Questions About Buying Gold In Singapore
Is Gold Bullion Taxed?
When you buy gold in Singapore (gold that has at least 99.5% purity) in investment form, you won’t be paying tax. But if you’ve bought physical gold (specifically gold bullion) and its value increases over time, you may have to pay capital gains tax by the time you sell it.
Is Gold A ‘Risk Diversifier’?
Gold is usually considered a risk diversifier for investment portfolios because it reduces risk and losses when bonds or stocks fall quickly. Regardless of recessions, this tends to hold true. Gold is highly liquid, meaning investors can easily hold cash in their holdings.
Conclusion: Where To Buy Gold In Singapore
Gold can be bought in Singapore, in a number of ways. You can buy physical gold at gold retailers, jewelry stores, brokerages, etc, or you can invest in gold via gold certificates, Gold Exchange Traded Funds, gold savings accounts, or gold futures and options. Where you buy your gold depends on the way in which you’re acquiring it.