The global economic collapse took no prisoners when it nearly sent the financial system into the dark ages. The aftermath of this debacle saw several powerful central banks pumping in billions of dollars as economic stimulus, thereby leading to a huge shortfall in money supplies.
As a result, dollar values have been subjected to tremendous volatility and precious metals like gold and silver have caught the eyes of skeptical investors as reliable hedges against the failing monetary policies. Over the past few years, Singapore has become one of the hottest gold investment destinations in the world. This growth can be attributed to the low personal taxation, strong dollar performance, business-friendly trade laws and a stable political climate.
Gold bars imported from Hong Kong, Australia, Japan and Switzerland, are exported to highly profitable gold-consuming markets across Southeast Asia and India.
The Resurgence of the Singaporean Gold Investment Market & Why You Should Be a Part of It
With the elimination of the 7 percent GST from investment-grade precious metals, Singapore has become even more attractive to international and local investors as a secure haven for their gold investments.
As a consequence of this policy shift, numerous gold dealers such as BullionStar have headquartered themselves in Singapore to make the best out of this opportunity. Even JP Morgan & Chase Co. jumped on the Singapore bandwagon and opened up a precious metals vault in the country.
Thanks to the recent correction in gold prices due to a massive sale of ETFs, Singaporeans were treated to a host of retailers selling gold at affordable rates. A Bloomberg report demonstrated that the Indian and Chinese market collectively consumes over 8 million ounces of gold each month. This demand is predicted to endure over the coming months; hence, gold can be a great periodic investment to make for Singaporeans whenever the precious metals market undergoes a minor correction.
Secondly, gold is a proven powerhouse investment in times of volatile equity; hence, it can prove to be a solid portfolio diversifier and shot in the arm for Singaporeans seeking a vehicle to park their CPF funds in that can beat inflation.
Figuring Out the Right Gold Investment For Your Needs
Building your wealth through gold can be accomplished through 3 key avenues, which are:
- Bullion Coins
Bullion coins like the American Eagle Gold and Singapore Lion Gold can be purchased as investment grade legal tender coins that vary in size and weight. These gold bullion coins can be bought at a minor premium to the spot price of gold. Singaporeans looking to buy gold coins and bars can approach the Singapore mint and UOB.
- Gold Exchange Traded Funds
Gold ETFs make for the smoothest form of precious metals investment that directly reflect the market price of gold. They are traded on all major exchanges and each ETF share corresponds to an explicit denomination of gold.
Aside from the fixed 0.2% commission fee and minimal yearly storage fee, ETF investors are shielded from the inconvenience of storing physical gold and shelling out costly charges to do so. Gold ETFs offer high liquidity in comparison to physical gold as an investment.
- Gold Futures
Futures contracts are leveraged products that are traded on margins. Simply put, they are financial commitments that guarantee a buying or selling order of gold. The quality, quantity, date of delivery, and agreed price are pre-defined in the contracts.
Although gold futures do offer a significant degree of liquidity to investors, their leveraged conditions may not be a reliable bet for risk-averse investors in the precious metals market.
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