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.

The slide in inflation rate coincided with a corresponding decline in gold price, which peaked in 2012 and suffered a slump till 2016.

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.

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 in 2016.

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.

In fact, even though US has increased interest rates, it does not mean big economies like the European countries, China and Japan will follow suit.

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 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, gold price peaked and had a free fall, reaching USD1255 per ounce.

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.

In view of the current weakness in price, wealth builders should seize this opportunity to buy gold bullion as part of portfolio strategy.

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.

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 has strengthened significantly, leading to a decline in gold price in the second week of November.

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.

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.

DBS investigated by MAS

Nevertheless, even if one down-plays the SGX market disruption, an even more sinister development awaited Singapore investors.

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 journey to succeed financially.

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 have recently implemented.

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 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. This means that the trading instruments for gold in the London market are mostly not backed by physical gold.

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 because very often, the stock market moves very swiftly.

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 on investing what you know best.

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 Trends in 2016

Alistair Hewitt, Head of Market Intelligence at the World Gold Council, said: “In a year that saw global economic and stock market turmoil, the first US interest rate rise in nine years and falling oil prices, demand for gold remained resilient, coming in at 4,212 tonnes for the full year.