In the aftermath of Brexit, investors scramble for safe haven assets and set gold and silver on fire. The precious metals have climbed to new highs in recent weeks as investors realize that even a stable currency like Sterling pound can drop in value over-night.
As investors pile into gold, the price of the yellow metal surged by 28%, making it one of the best performing assets to hold. At the rate it is climbing, gold may hit the level of US$1,400 per ounce. This is a remarkable turn-around as previously, gold price has declined to a low of US$1050 per ounce in December 2015.
Precious metals bull-run
The current market sentiments seem to suggest that gold may be at the start of a bull-run. The sustainability of the bull-run will depend whether there are further market shocks that trigger investors to flee for safety. For 2016, shell-shocked investors have already witnessed the Chinese stock market carnage, plunging oil prices and then Brexit. These events have fuelled the surge in gold and silver prices.
While gold has been attracting investors’ attention, silver price has also stormed to record level. At US$20.16 per ounce, spot silver rose by 47% since December 2015. Traditionally seen as more volatile as compared to gold, silver is a favourite asset among traders because of its low-cost. Silver has not reached the record level of US$43 per ounce seen in 2011 yet. But given the amount of uncertainties in the market now, there is sufficient leg room for silver to rise much further.
Market analysts are optimistic that US will not raise interest rates this year. A low interest rate environment is good for gold and silver because it will reduce the opportunity cost of holding physical precious metals as gold and silver bullion do not yield income. There are also very few alternative assets for investors to allocate their wealth, thus many institutional players are now attracted to gold and silver bullion.
As a wealth builder, it is important to diversify wealth in different asset classes and not put all your eggs in one basket. Traditionally, the stock market generates the best returns for investors over the long run but there is a need to understand the concept of risk and returns. With higher returns, there are higher risks of losing your investments. Hence, it is not wise to channel all your funds into the stock market because all it takes is one market correction to wipe out your capital.
Gold and silver bullion allow you to transfer your wealth out of the treacherous financial system and hedge against market uncertainties. In particular, gold can preserve your wealth and protect your purchasing power in the face of inflation or deflation.
In Singapore, BullionStar’s Bullion Savings Programs allow you to trade gold and silver online at any point of time. At very low price premium and spread, BullionStar allows you to convert grams in the Bullion Savings Programs (BSPs) to 100g PAMP Cast Bars and 15kg Heraeus Bars. Unlike other bullion savings programs (BSPs) are fully backed by physical precious metals.
Setting up an online account is pretty simple and you can choose to pay in different currencies, including Singapore dollar and Bitcoins. In addition, the price is very transparency as BullionStar’s website displays the price premium and spread for each bullion. This allows buyers to make price comparisons online before making the purchase.
BullionStar also offers customers their own minted gold and silver bars with zero spread. They have commissioned world-renowned LBMA-approved Swiss gold refiner Argor-Heraeus to produce these stylish and unique minted 100 gram 99.99 % purity gold bars.
Below are some gold bullion offered by BullionStar that are worth buying:
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SG Wealth Builder