In today’s article, we’ll show you the different ways you can invest in gold, depending on your investment objective and risk appetite.
One of the oldest and most traditional ways to invest in gold is to buy a physical piece of gold.
This can be in the form of gold bars, gold coins or jewellery. Note that gold for investment should be of investment grade(between 0.90 and 0.9999 fineness) and that they are usually priced at a slight premium to paper gold.
1) Gold Coins & Bars
Popular gold coins that are bought for investment include the Canadian Maple Leaf Gold coins, American Eagle gold coins, Australian Koala and the Australian Kangaroo coins.
In recent years, and especially in Singapore, collectors are also increasingly buying up Chinese Panda coins.
In terms of investment prospect, I would categorise gold coin investment under the “collectables” type of investment rather than a traditional investment as the value of the coins can be impacted by the amount of mintage, the year it was minted and demand for them by collectors.
Buying gold bars is also an increasingly popular option, with even retail jewellers marketing them as gifts these days. Gold bars come in different weights and sizes, and they are also released under different brands.
Some of the more recognized brands in the market are those released by Pamp Suisse, Credit Suisse and Perth Mint. You can buy them from UOB or specialised retailers such as DKBullion or BullionStar.
Remember to compare the buying and selling price to catch the best deals!
2) Gold JewelleryBuying gold jewellery is very much instilled in the psyche of Chinese and Indians, with both countries being the biggest consumers of physical gold.
In Singapore, gold jewellery is still popular as an adornment to be worn during the Chinese New Year and as wedding gifts. While you’ve probably heard of your mother saying how you should be at least a 916 or 999-grade gold, they are actually right in the sense that these are considered investment grade.
You will be able to sell them back to jewellers in the future due to their quality.
However, as a word of caution, you probably want to think twice about buying them as “investment” as jewellers typically charge a higher premium over the spot gold price for jewellery due to “workmanship” fees.
Use this as a comparison when you approach a jeweller so that you understand the premium they are charging you.
3) Gold Accounts
Gold accounts are quite interesting in the sense that you actually get to buy paper gold instead of physical gold. This means that you do not need to think about safe-keeping your gold in a vault, which will incur extra fees and charges.
The gold holding is recorded and there is a minimum investment quantity required for buying and selling. So far, there seems to be only UOB and ANZ in Singapore offering a gold savings account.
This can be a convenient way for investors who are hesitant to buy paper gold and don’t want to have the liability of safe-keeping their own physical gold.
With this type of account, you can also be assured of the quality of the gold purchased as well as the security of your gold investment.