Category: Gold; portfolio management

Divested my physical gold

gold bullion Singapore

Recently, I partially divested my physical gold for 10% yield amid the rally in gold price. The reason for selling my gold is not because I lost faith in it but solely to consolidate my funds to prepare for the impending Temporary Occupation Period (TOP) for my Executive Condominium.

The average annual yield from my physical gold investment is about 3.33%. Although the return is nothing to shout about, it is still above the prevailing bank interest rates. It is also above the average inflation rate in Singapore for the past three years.

Interestingly, the inflation rate in Singapore has dropped drastically from a high of nearly 6% in 2012 to negative 1% in the middle of last year. Is negative inflation good for Singapore? Absolutely not the case. If negative inflation persists, it may lead to deflation and causes the economy to spiral out of control. Japan’s economy is a classic example. The country has been struggling with deflation for the past 20 years and has to implement Negative Interest Rate Policy (NIRP) to revive the economy.

gold bullion Singapore

The slide in inflation rate coincided with a corresponding decline in gold price, which peaked in 2012 and suffered a slump till …

Buy gold bullion now?

BullionStar

In 2016, Brexit set fire on gold and ignited a rally in gold price. In 2017, it was newly elected US President, Donald Trump who ignited an unexpected gold price rally with his controversial policies. Should wealth builders buy gold bullion now?

In my own opinion, every leader is entitled to defend his country’s national interests. Whether Donald Trump’s policies, which have been viewed by many critics as being protectionism, will lead to a stronger United States is subject to debate.

But Trump’s actions certainly create a lot of market uncertainty. And one of the things that investors hate most is uncertainty. Due to this, investors flee for safety and buy gold bullion. Since Donald Trump took office, gold price has rallied to USD1233 per ounce. On the current form, gold price is certainly very bullish and looks to rise further in the short-term.

gold

Based on data released by World Gold Council, gold has a mixed performance in 2016. While the price has recovered from a low of USD1067 per ounce since end 2015, demand for gold bar and coin has dropped by 2% year-on-year. This is because many investors has been put off by the high price of gold …

Golden start for gold price

gold bullion Singapore

What a golden start for gold! Since the beginning of 2017, gold went on a rampage and increased in value by 6% within 2 weeks. This will be a short post to capture the latest trend on gold price.

What actually fuelled the surge in gold price? Many analysts could not really pinpoint the real cause but it certainly seems like 2016 all over again. Back then, when the US Federal Reserve raised interest rates for the first time in many years at the end of 2015, gold price also dramatically rose in value.

Will history repeats itself for gold price? The current trend indicates so. Since US Federal Reserve raised interest rates by 25 basis points on 14 December 2016, gold price crashed to USD 1129 per ounce but subsequently recovered and spiked to USD 1200 per ounce in 2017.

Conventional wisdom indicates that once interest rates in USA increased, gold price will likely drop because the precious metals does not yield interest. The opportunity cost of holding physical metal under such circumstances made cash more appealing. However, the world has evolved and things have become more complicated.

gold bullion Singapore

In fact, even though US has increased interest rates, it does …

Crazy year for gold price

BullionStar

It has been a crazy year for gold price! Towards the tail end of 2015, gold price dramatically fell to USD1054 per ounce upon the announcement of the interest rate increase by US Federal Reserves. Since the start of 2016, global investors were stunned when gold price surged to USD1350 per ounce within seven months.

The surge in gold price was due to the sudden crash in the China stock market which caught many by surprise. The massive sell-off in the stock market of the world no.2 economy triggered tremendous panic and caused many investors to flee for safety. As gold is traditionally seen as a safe haven for investments, gold price stormed to USD1237 per ounce. A majestic fine run indeed!

gold

Gold price was given further boost in mid-year as a result of the fall out from Brexit. As the epicenter of the event in London unfolded, gold climbed to USD1360 per ounce at one point. Government officials, analysts and economists were all dumbfounded by the results as most of them expected UK to remain part of European Union. In the midst of the chaotic situation, Brexit sparked an explosive gold price surge once again.

Somehow after the event, …

Buy gold bullion in Singapore

gold bullion Singapore

Since Donald Trump became US President-elect, gold price has been falling for the past few weeks. Amid the price weakness, wealth builders must be wondering whether to buy gold bullion in Singapore now.

To put things into perspective, there is a dichotomy between the price of gold and the actual demand for the precious metal. Most economist would tell you that the prices of all goods and services are governed by supply and demand. The higher the demand, the higher the price. However, gold is unique in the sense that such logic does not always hold true.

One reason for such strange phenomenon is because gold price discovery is primarily in the paper market, and not the demand for physical gold. London Gold Market dominates global gold price discovery and is regarded as the leading global centre for over-the-counter (OTC) transactions. According to BullionStar, 95% of the gold traded in London is unallocated, has no legal title, and is merely part of a fractionally reserved paper gold system. In this regard, the dynamics of the markets for paper gold and physical gold differ greatly, even though both are linked by the gold spot price.

gold bullion Singapore

In view of the current …

The signal to buy gold bullion

BullionStar

This will be a quick post to provide an update on the latest global demand for gold bullion. According to World Gold Council, the demand for gold bar and coin was weak in Q3 due to the high gold price. Market research revealed that investors generally look for low gold price as the signal to buy gold bullion. This explains why the demand for gold bullion has been declining since end 2015.

Another cause for the weak demand in the third quarter was a lack of momentum in the price. Following the implosion of Brexit, gold price had surged to a high of USD1365 per ounce in July and maintained around that level for about three months. Long term investors were put off by such high price and this led to declining buying interest of gold bullion.

gold

Year-to-date demand for gold bars and coins amounted to 664.2tonnes, the lowest since 2009. However, demand may improve in Q4 as the price drop results in renewed retailer’s interest in the USA, India and China. The demand for physical looks set to increase in the aftermath of US President-elect, Donald Trump, who advocated trade protectionism. In fact, since his appointment, the US dollar …

Will gold price surge with the new US President?

BullionStar

8 November 2016 will be a destiny day for Americans when they cast their votes for their new President. Whether its Hillary Clinton or Donald Trump, it will be a tight race for sure. With so much uncertainties, will gold price surge with the new US President?

Most people assume that the popular Hillary Clinton will prevail and win the election hands down. But the American election voting system is not so straightforward. The candidate can win more votes but still lose the race. Why is this so? This is because of the complex US voting system – the Electoral College.

Under this profound system, Americans are actually not voting for the nominees directly. They are in fact voting for a group of electors representing their states. Each state has equal numbers of Congressman and Senators. The bigger the state, the more electors. At the state level, it is a winner takes all game. So the key is actually winning more electors, and not more voters.

This system is obviously very different in Singapore, whereby the number of votes determine the winner.

gold

Thus, it is important to note that because of this US complex voting system, the result on

Sell everything and exit the stock market?

Warren Buffett

Brexit happened just a month ago but already it seems like an eternity for many investors. Since then, a series of unfortunate events had happened in Singapore stock market.

SGX market disruption

First, on 14th July 2016, the local stock market experienced a major disruption that resulted in ceased trading at 1138 hours and remained closed for the rest of the day. Some investors and traders received duplicated confirmation messages while some did not receive any confirmation messages after their trade were done. Investigation found that the disruption was due to a disk failure and SGX had moved to rectify the problem.

The market disruption had made a serious dent on Singapore’s reputation as a major Asia financial trading hub. Such an incident impacts the livelihood of traders, especially short-sellers who have to cover their positions by certain timing. For Singapore to sell itself as a so-called trading hub of Asia, it is a given that SGX trading engine have a high level of reliability. Otherwise, there will be no confidence level from investors and traders on the local stock market.

shutterstock_309324755

DBS investigated by MAS

Nevertheless, even if one down-plays the SGX market disruption, an even more sinister development …

Gold price to surge to USD65,000 per ounce in 5 years?

gold bullion Singapore

Before Brexit took the world by storm last month, BullionStar boldly predicted that gold price will surge to USD65,000 per ounce in 5 years in one of their articles. To be frank, even though I am bullish on the long-term prospect of gold, it is difficult to envisage that gold price will reach such stratospheric level.

If gold really do reach USD65,000 per ounce, it would be approximately 48.5 times the present level. Those who have bought just one piece of the 1kg PAMP Gold Bar would become an instant millionaire. But then again, under such circumstances, inflation would probably be ultra-high, hence that one or two millions worth of fiat currencies would probably have limited purchasing value.

One important lesson that I have learnt from my years of financial blogging is that it does not matter whether BullionStar’s prediction is accurate or not. It only matters if you are prepared to build wealth with gold bullion. No analysts or economists can predict the future and there will always be endless debates who is right or wrong. At the end of the day, you have to ask yourself what actions have you taken in the course of your wealth …

Devastating effect of Brexit

BullionStar

As one of the very few reserve currencies in the world, Britain’s Sterling pound is considered to be one of the most popular reserve currencies held by many central banks. Historically, Sterling is the third most widely held currency, after US dollar and Euro. Thus, one cannot ignore the devastating effect of Brexit on Sterling pound when it recently plummeted to historic low. Currently, Sterling is trading at a 31-year low and this led to a lot of fear in the market.

Market turmoil

The current turmoil stems from the massive drop in the Sterling pound which wiped off billions from the markets. Governments which hold Sterling pound as foreign currency reserves suffer huge losses. Many investors fled for safety and bought into Japanese yen, causing the yen to rise substantially. The upward swing results in Japanese exports becoming expensive overnight and potentially worsen the deflation condition in Japan economy.

The havoc in the currency markets may prompt central banks to take drastic actions before the situation manifests into global crisis of confidence. Some of the possible measures may include further interest rate cuts, stimulus packages to encourage spending or even negative interest rates, which Japan and several European countries …

How safe is your money in Singapore banks?

BullionStar

No bank is too big to fail and one question that every depositor may ask is how safe is our money in Singapore banks. During the Great Financial Crisis, Citigroup was on the brink of collapse before being rescued by the U.S government, which had to guarantee losses on more than US$300 billion worth of assets and injected US$20 billion into the troubled company. At that point of time, Citigroup’s share price was trading less than US$1, which was the historical record low for the bank.

Money Crisis

Fast forward today, Citigroup recovered from the crisis but is no longer the world’s largest bank in terms of assets. However, its share price has surged to close to US$50. Investors who bought the shares back then and held it till today would have made a fortune. But the point that I want to reiterate is that Citigroup was very close to being made bankrupt in 2008 and savers who put all their hard-earned savings in banks may have lost their monies overnight if the renowned bank collapsed unexpectedly.

Singapore Banks

In the aftermath of the financial crisis, people start to realize that the prospects of bank failures are real even in …

Buy Gold, Now or Never?

buy gold Singapore

When it comes to investing in gold, there is a need to understand the fundamentals and study the long term trend of the gold spot price movements. According to BullionStar, the global daily amount of gold mined is only 9 tonnes, yet the daily trading volume in London amounts to 5,500 tonnes. Why is this so and how does this affect the price of gold? Should wealth builders buy gold, now or never?

London is the heart of all the gold trading activities and is regarded as the world’s largest gold market. The market in London set the price for spot gold for the rest of the world to follow and London is also the home of London Bullion Market Association (LBMA), a renowned trade association known for setting the refining standards, trading documents and trading practices. Henceforth, the data concerning gold trading activities in London will provide insights on the value of gold moving forward.

Generally speaking, the supply and demand rule is not strictly applicable to physical gold. In fact, the total amount of gold mined will have limited effect on the price movements of gold because 95% of the gold traded in London is actually unallocated. …

Start of a bull run for gold?

buy gold Singapore

Since the beginning of 2016, gold price had seen a meteoric rise of 21%. It rose from USD1061 to USD1292 per troy ounce at this point of writing, representing an incredible come-back by the yellow precious metal. Is this the start of a bull run for gold?

Traditionally seen as a safe asset class, the surge in gold price is due to the poor economic climate. The combination of oil crisis, China stock market crashes, negative interest rate policy by Bank of Japan and weak global growth currently make gold an attractive commodity for investors to hold. After all, it has been regarded as a safe haven for decades during economic downturns and sky-high inflation.

If you are one of those who think that the current market climate is doing “fairly okay”, then perhaps you have not been following the news or you must be an extremely optimistic person. The matter of fact is that many businesses are finding it challenging to operate under the current climate and the global market is basically waiting for a Black Swan event to implode. By then, it will be too late for you to liquidate your stocks and transfer the fund to gold …

$500 profits from UOB Gold Savings Account

Gold and Silver

Yesterday, my wife liquidated our UOB Gold Savings Account (GSA) and made a profit of $500. It wasn’t a big amount of course but considering the fact that we held the account for only one week, it was really easy money. Opening the UOB Gold Savings Account account was really hassle-free as you may do so at any UOB bank branch located near your home.

The best part about UOB Gold Savings Account is that you can use UOB Personal Internet Banking to carry out transaction via the internet platform or UOB Mobile from Mondays to Fridays 8am to 11pm excluding Singapore public holidays. This is a new feature introduced by UOB bank a couple of years ago.

Before you open an account, please check out the various fees for UOB Gold Savings Account in UOB’s website. There are several charges that you need to factor in because they would affect your yield.

This is not the first time that I touched on UOB’s GSA. A few years ago, I had also made some money from UOB GSA and shared with readers the merits and pitfalls of investing in gold. When it comes to building wealth, you should always focus …

Gold’s explosive start in 2016

Gold and Silver

With fear firmly in grip on the global stock markets, gold price has seen an explosive start to 2016. The precious metal has surged an impressive 17 percent after bottoming in December 2015. Investors are fleeing the stock market and pouring massive funds in safe haven like gold and silver. Currently, gold is trading at spot price of USD 1238.40 per ounce. While it is still premature to claim that gold is in bull market, one thing that is certain is that globally, gold is still regarded as the safe haven in the midst of stock market chaos.

According to World Gold Council, the global demand for gold in 2015 remained flat as compared to 2014 at 4,212 tonnes. In spite of a weak start to the year 2015, gold demand rebounded in the 2nd half of 2015 due to huge buying from central banks and China. In fact, for China, the overall gold demand rose by 21% with investment in gold bullion being particularly strong as investors flocked to precious metal amid weaker currency and slowing economy.

Gold and Silver Bullion

Gold Trends in 2016

Alistair Hewitt, Head of Market Intelligence at the World Gold Council, said:In

Monetary Authority of Singapore finally regulates gold buy-back schemes

In perhaps one of the most overdue regulatory safeguards for Singapore investors, Monetary Authority of Singapore (MAS) finally announced that precious metal buy-back arrangements will be regulated either as debentures or investment funds, depending on their features. This announcement was made after its consultation paper published on 21 July 2014.

This move to regulate the precious buy-back schemes is a result of the spate of gold ponzi schemes offered by Genneva Gold, The Gold Guarantee and Suisse International in Singapore. Seduced by the so called guaranteed payouts of 20% or incredibly high buy-back prices, many unwitting investors were sold on these gold buy-back schemes. Many of these victims didn’t realize that they were actually walking into traps devised by cheats.

In the aftermath, many victims sought to enlist the help of the authorities to claim back their investments but were shocked to find out that these financial instruments were not regulated at all. There were even reports that some victims sank more than hundred of thousands of dollars of their hard-earned savings into these gold-back schemes. Some even pooled money with their families to join these schemes.

The reason why many Singapore investors were conned was because many of them …

BullionStar on gold developments in Singapore

SG Wealth Builder is pleased to conduct an email interview with Torgny Persson, CEO of BullionStar, a bullion dealer based in Singapore which exempted investment grade precious metals from the goods and services tax (GST). Just like BullionStar, one of the the goals of SG Wealth Builder is to educate Singaporeans on the merits of owning gold and silver bullion as a means of wealth preservation. 

1) In view of the emergence of China as the leading producer and importer of gold bullion, what do you think would be the implications for the global markets and how should investors in Singapore position themselves?

The Chinese public are buying vast amounts of gold. Our precious metals analyst Koos Jansen is writing regular updates on the withdrawals from the Shanghai Gold Exchange. Total Chinese gold demand can be measured by the amount of physical gold that is withdrawn from the vaults of the SGE.

The Chinese government hasn’t updated its official gold holdings figure of 1054 tons for several years, but many have speculated that the actual figure is much higher (probably by several thousand tonnes) than the official one.

In addition to increasing their reserves, the Chinese government is …

Why Singaporeans always lose money in gold investments

Ignorance is one of the main reasons why investors consistently lose monies when it comes to investing because the biggest risk comes from not knowing what you are doing. The second factor is greed, which causes investors to lose sight of the risks involved in alternative or exotic investments. In the pursuit for higher returns for their monies, those who are greedy overlook or underestimate the risks involved. Thirdly, arrogance is the ultimate downfall for those who don’t respect the market. Always remember the golden rule that you can never win the market consistently, so avoid leveraging your investments if you don’t have the holding power. Yes, leveraging can increase the profit margins, but it can also backfire and widen your losses when the market turn against you.

In early February 2015, news broke out that more than 250 Singaporeans lost an estimated $35 million in yet another flopped gold buy-back scheme operated by Suisse International. Unhappy investors gathered outside the police headquarter trying to lodge police reports to the Commercial Affairs Department (CAD). It was amazing that after so many widely reported cases of gold buy-back scams, Singaporeans still fell prey to such schemes. There were a few who …

Take advange of gold price’s correction!

gold price

Physical gold and silver buyers are once again treated with a surprise selloff in the gold and silver paper markets. Amidst high demand for physical bullion, especially in Asia, paper markets still set the price for real physical precious metals. At BullionStar, gold price and the price for physical precious metals are expected to decouple from each other eventually as physical demand continues to increase.

While western speculators are selling off paper gold, physical demand for gold is rising rapidly. In the World Gold Council’s Q2 report, demand for bullion and jewellery increased a whopping 53 % in the second quarter of 2013 compared to one year ago.

To put things into perspective, gold price has been on a bullish run for the past 10 years. The current correction should be seen as a healthy sign as the bull cycle for gold price comes to an end. Wealth builders should seize this opportunity to accumulate more physical gold as the gold price experience a soft landing.

Singapore is viewed by many international investors as the best place to buy and store gold because of its low crime rate and strong jurisdiction laws. However, low crime does not mean no

Beware of Ponzi-like gold scams in Singapore

Published by BullionStar Singapore 

Beware of Ponzi-like gold scamsAlways remember, caveat emptor (buyer beware)

It is important for each one of us to do due diligence, in whatever endeavors we undertake. When it comes to precious metals investing, for example, you could not afford to think that just because the investment is sound, it follows that you can’t go wrong.

Look at all the gold exchange-traded funds and mutual funds whose values are derived from gold futures, the physical gold of which does not even exist. If you try to have such paper gold delivered, you’ll be left with nothing. This is why we advocate buying physical gold, the type that is stored in finite supply in your residence, or in our vault.
But even within the physical gold market, we can expect scammers to spring up, finding a way to defraud investors. Here’s a tip: whenever you hear about a certain company, just search on the Web, ‘Company X scam.’ If the search results show a lot of complaining customers or court cases, stay away!
Note, however, that these companies are aware of their Google-savvy potential clientele. The company may have ‘planted’ their own positive reviews that have the search word ‘scam’ in

BullionStar’s My Vault

Bullionstar

For international and domestic investors seeking a safe haven for their precious metals, BullionStar’s “My Vault Storage” offers a convenient, end-to-end solution for the purchase, sale, storage, and delivery of an assortment of bullion products.

Bullion investors assume a considerable amount of risk keeping even a moderate amount of bullion in uninsured storage solutions. Also, the fact that there is more “paper” Gold or Silver in circulation than there are backing of physical precious metals increases the risk of defaults on the commodity exchanges.

Even though Singapore is a safe country with low crime rates, gold investors should not take chances with their precious metals. If you have a substantial holding of bullion, it makes sense to store them at a secure facility run by a reputable company. In this regard, only a bullion vault should provide gold investors a form of assurance that their gold or silver bars are in safe hand.

BullionStar CEO

By engaging the services of some of the top secure storage facilities in Singapore, one of the safest countries in the world, and with easy to use online system, Bullion Star is able to address these concerns with “My Vault Storage”. BullionStar provides the maximum level

Good time to buy physical gold?

gold price

SG Wealth Builder is pleased to conduct another interview with BullionStar Singapore on gold investments.

Recently, gold prices has dipped quite a lot. In your view, do you think its only a correction or the start of a bear trend for bullion?

Many relate the slump in prices due to the recovering US economy and news that the Feds are easing on their QE programs. Other factors include China, being a net importer of gold, not performing as well economically as expected and Cyprus selling its gold reserves to clear its debts.

Gold

However, as investors are dumping “paper” gold in the market, we are experiencing a completely opposite environment here in the physical precious metals market. People are rushing in to buy physical precious metals to take advantage of the low prices right now to the extent that the mints/refineries are not producing enough to meet demands.
We are looking at a 6-8 weeks lead time upon ordering and premiums are increasing because of the rise in demand.  With such heavy buying in the physical market, it will only be a matter of time when the investors and traders become bullish again and start to push the price of gold

Gold ETF

BullionStar

Below is an article on gold ETF extracted from SGX published in 2011:

1) SPDR Gold Shares® (GLD) ETF participation has increased in August on account of the volatility that has coincided with Standard & Poor’s downgrading the credit rating of the United States to AA+ from AAA.

2) Unlike Gold Futures, the GLD ETFs do not extend leverage to the ETF buyer and sellers.

3) In Asia, the GLD ETF is cross-listed in SGX, Hong Kong and Japan. SGX maintains the largest market share of GLD with over 53% of Asia volume transacted on SGX.

4) Spread-wise, the GLD ETF has the most competitive average spread of 9.487 bps where the average spread of GLD in HK and Japan are 12 bps and 11 bps over the past one week.

Gold ETF
SGX currently lists 84 Exchange Traded Funds (ETFs) that cater for a number of assets, investment strategies and risk appetites. The events of August have seen participation growth in the SPDR Gold Shares® (GLD) ETF that has coincided with the rising price of gold that reached a new high as measured by the London Gold AM Fix closure of US$1786 on 11 August.

The GLD ETF is a cash-based …