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Singapore gold bullion market

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In the aftermath of the Singapore’s GST exemption for investment grade precious metals since 2012, many bullion dealers has set up shop to take advantage of gold liberalization by Singapore government. In its latest financial results, it was revealed that BullionStar led in Singapore gold bullion market.

According to data released by World Gold Council, the overall bullion demand in Singapore decreased to 1.2 tonnes in 1Q16 from 1.6 tonnes in 1Q15. The sluggish demand in physical gold could be attributed to the surge in gold prices seen in 2016. Gold price exploded during that period of time because of the crash in China stock market. As a result, the high gold prices cooled demand among wealth builders. Interestingly, BullionStar sold 0.5 tonnes of gold bullion, thereby contributing to 42% of the total Singaporean bullion market.

As we enter into the 2nd quarter of 2017, the world continues to witness uncertainties arising from USA trade protectionism and the negotiations of Brexit with European Union. On the other hand, the recovery of USA economy and the positive employment data drive America stock market to new highs.

Wall Street continues its mighty bull run and at one point, broke the record of 21,000 points. It is unknown whether there would be further upside in stock prices but investors should exercise asset allocation to diversify risks in their portfolio. Gold bullion offers one of the best opportunities for wealth builders to de-risk their portfolios in the face of market volatility.

UOB

Gold spot price had held up surprisingly well in the first quarter of 2017, rising by 9% year-to-date to USD1255 per ounce. At a time when the US Federal Reserve signaled at least three interest rate hikes, many thought that gold spot price would crash because of the opportunity loss in holding physical gold. Yet, gold price confounded critics by going from strength to strength.

Amid the growing interest in gold bullion, BullionStar’s business continued to perform well. Sales revenue for FY 2016 was SGD 134.2million, up from SGD 63.4million in FY 2015. Growth had been driven by increased sales from international and local customers. There were significantly more international customers due to the awareness of the advantages of buying and storing gold bullion in Singapore.

Gold consisted of 72.57% of total sales for FY 2016. The increase in popularity for 100 gram gold bars and 1 kg silver bars are attributable to the high demand for the BullionStar 100 gram gold bar and the BullionStar 1 kg silver bar. By the end of FY 2016, BullionStar stored approximately SGD 84.1million in precious metals as vault storage provider on behalf of their customers. This corresponds to an increase of 58.7% compared to one year ago. This data revealed that many wealth builders are starting to view precious metals as a form of safe asset for saving purposes.

BullionStar continues to be among the top bullion dealers in Singapore with over 500 different bullion, numismatics and coin supply products across 10 different product categories. I am not aware of any other dealers which carry so many variety of bullion products. Apart from BullionStar, UOB is a popular choice among bullion buyers because it is the only Singapore bank that sells physical gold and silver. However, the selling prices for the popular gold bars, like PAMP, are higher in UOB. So those who bought gold bars and coins from UOB are effectively paying more in terms of the price premium.

               Gold and Silver Bullion

In Singapore, some investors may prefer to buy gold bullion from UOB because of the bank’s reputation. However, it should be noted that the bank does not carry as many variety of bullion products as BullionStar due to the fact that the latter is a boutique bullion dealer. In fact, BullionStar suite of services are even more comprehensive than UOB because customers can buy, store, sell or request physical withdrawal their bullion through My Vault Storage® online 24/7.  Opening an account with BullionStar is easy and you may also purchase insurance protection for all stored precious metals covering all risks at full replacement value by the world’s largest insurance specie underwriter XL Insurance.

Previously, I have written an article sharing that I have made some money from UOB Gold Saving Account (GSA). Like UOB, BullionStar also offers gold and silver saving accounts in the form of Bullion Savings Program (Gold), which is fully backed by physical metals. However, BullionStar’s BSP is convertible to 100g PAMP cast bars at any time without any extra cost whatsoever. The storage fee for BSP Grams in gold is only 0.09% per year.

When it comes to owning gold and silver bullion, one must have the right mentality. The purposes of buying bullion should be primarily for wealth preservation. Thus, one should hold allocate about 10% to 20% of his wealth in bullion. The prospects of gold bullion in the long-term is still fundamentally sound because gold remains a significant part of many central banks’ reserves. Since 2010, central banks have been net buyers of gold due to the uncertainty of the international monetary systems.

In Singapore, the gold market ecosystem grew substantially with the removal of GST on investment grade precious metals in 2012. Being a country with low crime rate and strong jurisdiction system, Singapore is viewed by many international wealth builders to be the best place to buy and store gold bullion.

If you are an international investor, now may be the best time to start transferring your wealth out of the financial system by buying gold and silver bullion through BullionStar’s advanced online system.

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Updated: March 28, 2017 — 3:34 pm
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