Ways to trade Gold in Singapore?

Investing in gold or any other precious metals has been very popular since human kind is created. However investing precious metals requires special care to the logistics or maintenances/storages issues for the purchase, thus the solution to these problems would be Gold ETF funds.

What are Gold ETF funds?

Gold ETF fund gathers a huge amount of gold and maintaining the physical metal in storage space. They will then issue shares to the general public based on the concept that the values of the shares will increase by the same amount compared with the price of gold.What makes this type of funds attractive to investors is that trading gold ETF can be performs easily during market trading session using the brokerage account. Another advantage is that investor does not need to buy a large amount of gold for investment.  Although gold ETF funds have a minimum requirement but investor can trade in portions of an ounce which is excellent since not everyone can afford to pay for the price of an ounce of gold nowadays.

How to trade Gold in Singapore?

SPDR Gold Trust (GLD 10US$) which was listed in Singapore stock exchange was the very first Gold ETF fund in the world. They pay for 400 ounce gold bars from London Good Delivery Bars and issue the shares at 1/10 ounce of the gold. But it is important to note that based on the management fee of 0.4% annually, the investment trust would need to sell gold over the years to cover this cost. Thus the price of SPDR Gold Trust will reduce even if the number of stock remains the same. In simplicity term, the value of this Gold Trust will drop around 0.4% every year.

 
Read more: Gold ETF  

Advantages:

1. Reduce the hassle of buying insurance and finding storage space for the psychical gold.
2. High liquidity since it is easily accessible and can be traded anytime during market session in SGX.
3. Since it is traded like stocks thus possible to set “take profit” and “stop loss” limit using the brokerage account.
4. 24-hour global market data are readily available market data in the internet.

  

Disadvantages:

1. Since the stocks are traded in USD thus Singaporeans will have to suffer the exchange rate conversion and made this counter more suitable for long term investors.

 

Lastly investors might be interested to know that gold has been increasing in price since Oct 2008 from $68 to $121 as of the current price.