SG Wealth Builder

Amid the once-in-a-century COVID-19 pandemic, gold price surged to an 8-year high. The last time gold price reached such euphoria level was in 2012. Is it a bubble in the making for gold price or the start of an explosive bull run? Today, SG Wealth Builder is pleased to share an email interview with BullionStar’s Precious Metals analyst – Mr Ronan Manly.

1) Year-to-date, the gold price has soared from USD1,520 per ounce to USD1,730 per ounce. The gain is about 14%. Yet the rise has not been linear. At the peak of the COVID-19 pandemic in March 2020, the gold price dropped to a low of USD1,460 per ounce. What could be the reason?

The US dollar spot gold price, or ‘international’ gold price, is overwhelmingly established based on trading in two specific venues, the London gold market and the COMEX New York gold futures market. Both of these markets trade not real physical gold, but paper gold whose supply can be expanded at will out of thin air. That’s the first thing to remember.

Turning to March, when the wider financial markets saw unprecedented volatility triggered by fears of the pandemic, and when bond yields and equity prices …

2020 is shaping up to be one of the most intriguing leap years in recent memory. We have major political upheaval in Malaysia with Dr Mahathir resigning as Malaysia Prime Minister abruptly. The US Presidential election will have a major influence on the financial market. Coronavirus emerged out of nowhere to wreck havocs in China. In view of these uncertainties, gold price had a good run. But whether this run is sustainable is a big question because the epicentre of the virus is China, the biggest importer of gold in the world.

At the point of writing, there were about 2,700 deaths linked to the virus. The countries significantly affected by the virus outbreak are China, Japan, South Korea and Italy. Against this backdrop, global economic growth for 2020 is widely expected to slow down, fuelling the charge of gold price.

Traditionally viewed as a safe haven, gold price typically surge in times of crises as investors buy gold to preserve wealth. The coronavirus takes place at a time when US stock market hit a record high. Dow Jones hit a record peak of almost 30,000 points on 12 February 2020. However, on 25 and 26 February 2020, Dow Jones …

As 2019 comes to an end, wealth builders will surely look back and marvel at how gold price had stormed back in style. Since the beginning of the year, gold price had surged 17% to reach a six-year high. The last time that gold price was in such bullish form was 2009 – 2011. That was the tumultuous period in the aftermath of the Great Financial Crisis and European debt crisis.

Since 2011, global loose monetary policies and low interest rate environment caused gold price to fall from a record high of USD1900 to a low of USD1068 per ounce in 2015. The crash of gold price was the result of recovering US economy and strengthening of US dollar.

Question now is whether gold price will reach another high in 2020? In this regard, I don’t see why not. This is because the world has not seen another alternative safe haven for financial assets. And gold has always been used as a form of hedge against uncertainties and volatility in the financial markets.

In 2016, the crash of China stock market, UK Brexit and the US Presidential Election saw gold price surging from USD1100 to USD1300 per ounce. Based on …

Since the start of 2019, gold price went on a rampage to reach an euphoric high of USD1440 per ounce on 19 July 2019. This was a remarkable high of 11% increase since the beginning of the year. Of course this was still way off the peak of USD1900 per ounce seen in 2011, but current form of gold price reflected the resilience of the yellow metal.

What actually fuelled the surge in gold price? Many analysts could not really pinpoint the real cause but two factors could have caused gold price to become bullish in recent months.

Drivers for gold price rally

Firstly, the global trade war and the risk of a no-deal Brexit had increased the level of uncertainties in the financial market. Although most people would agree that the current situation does not reflect a recession, the global growth outlook remains pretty challenging.

Long seen as a safe haven, gold is often regarded as the asset to hold in times of uncertainties. In fact, gold price went on a rampage bull form in the period of The Great Financial Crisis to reach a peak of USD1,900 per ounce in 2011. The euphoria in gold was driven …

Will gold price ever return to its crazy high form? The recent meltdown of Asian Pay TV Trust (APTT) share price must have depressed many investors. Indeed, the Straits Times Index (STI), as a whole, had been performing poorly in 2018. Wealth builders who had ignored the wisdom of diversifying their portfolio in different assets are paying a heavy price now. Should stock investors run for their lives and shift their attention to gold instead?

Recent stock market corrections do not represent a full-blown crisis. But it does not reflect a signal for investors to enter the stock market either. Wealth builders should heed the warning and start insulating their portfolios against the risks unfolding in the market. You certainly don’t want to be caught with your pants down when there is a violent stock market correction.

Then again, it is naïve to assume that the current unrest in the stock markets would lead to higher gold price in the coming months. This is because gold price is intricately linked to the monetary system, financial markets and central bank policies. In short, the drivers for gold price are not as simple as one would think.

Long seen as a safe …

Where can wealth builders find the best price for bullion in Singapore? Against the backdrop of plunging stock market performance, plenty of investors must be on standby to purchase gold bullion to protect and de-risk their wealth portfolios.

Best Price Guaranteed

Amid the challenging operating environment, BullionStar go one step further by signalling its intent to be the price leader for bullion in Singapore through its “Best Price Guaranteed” for bullion in Singapore. If you find a bullion product with a lower listed price for an available identical bullion product with the same delivery method at one of their Singaporean competitors, BullionStar will match this price and add a FREE GIFT to your order completely free of charge.

Since 2012, Singapore government exempted Goods and Services Tax (GST) for investment grade precious metals. This pro-enterprise move led to a slew of bullion dealers setting up shops in Singapore. Among the first movers was BullionStar. Initially located in the Marina Bay Financial Centre, BullionStar had gone from strength to strength and had expanded into its current location at 45 New Bridge Road, adjacent to both Clarke Quay MRT.

Over the years, BullionStar had become a leading bullion dealer in Singapore. Such …

Many wealth builders view gold as a long-term insurance. This is because gold offers safe-haven qualities that serve to hedge against inflation and economic uncertainties.  In Singapore, the government encourages the locals to buy and sell gold, with a view of making Singapore a precious metal trading hub.

One of the policies that incentivize Singaporeans to buy gold is the exemption of GST for Investment Precious Metals (“IPM”).  Since October 2012, precious metals in the form of a bar, ingot, wafer and coin which meet certain criteria can qualify as IPM and are exempted from GST.

To qualify as IPM, the precious metal must meet 4 criteria:

• It is gold of at least 99.5% purity, silver of at least 99.9% purity or platinum of at least 99% purity.
• A precious metal bar, ingot or wafer refined by a refiner with the following accreditation/ endorsement is regarded as meeting this criterion:

For gold and silver, a refiner in the current or former ‘Good Delivery’ list of the London Bullion Market Association (LBMA);

• It bears a mark or characteristic that is internationally accepted as guaranteeing its quality.
• It is not a decorative bar, ingot or wafer or a collector’s bar, ingot or

According to World Gold Council, global demand for gold grew 21% to 1289.8 tonnes, the strongest Q1 on record. As gold demand ignites price rally, many investors are caught by surprise at the yellow metal best performance in 30 years.

The sudden change in the global economic and financial landscape has certainly caused investors to flee for security. Significant uncertainties stem from the sluggish economic growth and the Negative Interest Rate Policies (NIRP) implemented by Japan and European countries. Against this backdrop, many analysts anticipate that the pace of US interest rate increases is expected to slow down significantly. These factors combined to send gold price to rally by 17%, making gold one of the best performing assets in Q12016.

Among the key engine of growth is the astonishing come-back of gold-backed Exchange Traded Funds (ETFs), which saw an increase of 300% this quarter. This is indeed a revelation as it comes about after three years of straight outflow. While this type of scale is unlikely to be sustained for gold ETFs going forward, this trend reflects an improved outlook for gold.

Interestingly, the trend of gold bar and coins followed closely to that of the ETF market in Q1. …

I was reading an article written by BullionStar on SGX Kilobar and could not help but agreed with all the points. The blogger has correctly pointed out the major flaws in the product offering from SGX and also compared it to BullionStar’s products.

From a Singapore Inc perspective, of course I hope SGX’s project will be a success as it could have played a major role in fulfilling Singapore’s desire to become a gold trading hub, thus boosting our economy and creating more high-value jobs for fellow Singaporeans. Unfortunately, SGX messed up royally and thus, I foresee that Singapore may miss the golden opportunity to become a trading hub if the situation is not addressed adequately.

Firstly, by setting a 25 x 1 kilo bar of gold contract, SGX has inadvertently made this product exclusive for the big players. Not many retail players can afford to fork out $1.35 million and there are not many gold buyers who are interested in buying 25 kilobars of gold, especially in a small market like Singapore. In this regard, I am quite convinced that SGX has not done much market study on the gold demand before launching this product. If SGX is working …

Recently, my wife and I liquidated our UOB Gold Saving Accounts (GSA) again. We are consolidating our funds with the aim of purchasing a new Executive Condominium.

Overall, including the profits made on 25 February 2016, we made a total profits of $800 from gold. Not a huge amount of profits but considering the fact that we held the investments for only three weeks, it was quite a good investment in my opinion. But is it possible to make explosive wealth with gold?

Basically there are two main ways to invest in gold. One is to buy physical gold, that is gold bullion which comes in the form of gold bar and coins. In Singapore, you can purchase gold bullion from BullionStar, one of the largest dealers with more than 300 types of precious metals. The most attractive aspect about buying investment-grade bullion in Singapore is that there is no need to pay tax. Thus, foreigners can take advantage of this and make online purchases from BullionStar and then store their gold in BullionStar’s Vault Storage.

However, the thing about buying bullion is that you should not expect to make quick profits out of it. You …

In the latest gold demand trends reported by World Gold Council, it was stated that Singapore central bank amassed more than 120 tonnes of gold as reserves. The amount constitutes only 2% of our reserves and the report also ranked Singapore as number 27. The top country with the most gold holding is USA, with more than 8100 tonnes of gold, followed by Germany with 3400 tonnes. Not surprisingly, North America and Europe dominated the list.

Determining the official gold holdings and demand trends are challenging, given the lack of transparency and sheer complexity of the gold market. The report by World Gold Council is based on a complex methodology of data collected from domestic sources and international trade.

The important thing that can be gleaned from the report is that there was a 17th consecutive net purchase by various governments, reflecting a sign that central banks continue to rely on bullion as a form of hedge against volatile currency movements.

Given that Singapore is neither a country known for gold consumption nor a gold exporter, our strong gold holding reflects the government’s belief in the precious metal’s status as a form of holding value. This is probably because the …

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) Mr Torgny, in your opinion, what is the outlook for gold in 2015? Given that the economy recovery is gaining traction in United States, would there be any negative or positive impact for gold prices moving forward?

The so called recovery is a phony recovery in my opinion. The economies in the West are facing a lot of underlying problems with unprecedented debt levels, trade imbalances, high unemployment and misallocated investments. The current monetary system based on fiat credit and fractional reserve banking is going to implode under the debt burden. The price of gold thus hasn’t got so much to do with gold but everything to do with how worthless our currencies get.

Gold will revalue significantly in terms of purchasing power in the monetary reset we are soon to embark …

In a step to further increase customer transparency, Bullion Star published its financial information such as sales revenue, number of orders, average order, medium order, website visits and other key data in its website on 14th March 2015.

Sales revenue was impressive and amounted to $53 million with average order of $6475. BullionStar.com also had more than 850,000 visits from 268,000 unique visitors in 2014. Among the 180 different products that Bullion Star carries, gold bars were the most popular products, consisting of 52% of its total sales, followed by silver bars (18%).

To be frank, I struggle to find another bullion dealer that carries so many variety of bullion products that Bullion Star offers. Furthermore, the prices of their bullion products are among the most competitive that you can find in Singapore.

The company was started in 2012, straight after the Singapore government announced GST removal for investment grade precious metals, and became operational in 2013. SG Wealth Builder is honored to partner with Bullion Star to bring new exciting technology into the precious metal industry since 2013!

Among the various product offerings of Bullion Star, my favorite one is the Bullion Savings Program (BSP) that are fully backed …