In Singapore, there are several ways to invest in gold like gold certificates, gold saving accounts, jewelry or buying gold bullion coins or, if you are rich enough, gold bars. Although buying gold jewelry in Asia is a popular gold investment method, since you pay for the craftsman also, it is not the best way to invest. Another way is to buy gold bullion coins but there is a large spread as 7% GST to be paid while buying gold. But the GST on investment grade precious metals will be history soon.
Singapore Government has now recognized investment-grade gold and other precious metals as investment instruments such as bonds and stocks and by October 2012, Singapore will exempt investment-grade gold and other precious metals from 7% GST (goods and services) tax to spur the development of gold trading. This was announced by Finance Minister Tharman Shanmugaratnam on February 2012.
"Singapore will exempt investment-grade gold and other precious metals from a seven per cent goods and services tax to spur the development of gold trading, Finance Minister Tharman Shanmugaratnam said on Friday.
The change takes effect in October and may lift demand for gold bars and coins in the fourth quarter and into 2012. Singapore's investment gold demand nearly tripled to 3.5 tonnes in 2011, according to consultancy firm Thomson Reuters GFMS.
"It seems a little unfair to put a sales tax on what is essentially money. The removal of the GST on gold will allow Singapore to better compete with Hong Kong and other bullion trading centres in the region," said Nick Trevethan, a senior commodity strategist at ANZ in Singapore."[1]
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| Buying physical gold in Singapore will be tax free in Singapore by October 2012. |
Last month, Juerg Kierner, chief investment officer for Swiss Asia Capital in Singapore, said that gold prices may rise above $2,000 an ounce. Unlike paper money which is currently being destroyed by western central banks, gold has a store value which will hold up in the event of a currency crisis and will protect your money from inflation.
Buying physical gold, although storage and security might be an issue, is the more traditional way of investing in gold in Asia. You can physical gold as gold coins and bars in Singapore from some banks. For example, UOB sales gold coins and bars and publishes their selling and buying prices on their web site.
Investment-grade gold refers to gold (e.g. a bar, ingot, coin or wafer) in purity of 99.5% and above, possesses the following characteristics that differentiate it from gold in other forms such as jewellery.[2]
Buying physical gold, although storage and security might be an issue, is the more traditional way of investing in gold in Asia. You can physical gold as gold coins and bars in Singapore from some banks. For example, UOB sales gold coins and bars and publishes their selling and buying prices on their web site.
Investment-grade gold refers to gold (e.g. a bar, ingot, coin or wafer) in purity of 99.5% and above, possesses the following characteristics that differentiate it from gold in other forms such as jewellery.[2]
i. capable of being traded on the international bullion market;
ii. bears a mark/characteristics accepted as guaranteeing its quality; and
iii. trade at a price based on the spot price of the metal it contains.[2]
Although this is largely done to turn Singapore into gold hub and to attract refineries here, it will also benefit the investors here since they can diversify their portfolio into something solid like gold. You can buy physical gold in Singapore as gold bars and gold bullion coins. The price differs based on international gold prices and also the amount of gold you are buying (you buy bigger amount you pay less per oz). A 1 OZ gold bullion coin in UOB for example is sold for SGD 2,432 while a 10 OZ gold coin is SGD 23,837.
In Singapore, you have more options to invest in gold such as Gold Certificate and Savings Account. This will prevent the headache and risks of storing physical gold. But these are usually given against unallocated gold and are subject to risks like bank runs (bank does not have the whole amount of gold to cover up all the certificates or accounts). So there is risk on its own in this type of gold investment.
In Singapore, you have more options to invest in gold such as Gold Certificate and Savings Account. This will prevent the headache and risks of storing physical gold. But these are usually given against unallocated gold and are subject to risks like bank runs (bank does not have the whole amount of gold to cover up all the certificates or accounts). So there is risk on its own in this type of gold investment.
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