Gold is one of the safe-haven investments. It is recognized as a financial tool as it is considered more stable than other investments like fluctuating stocks and fiat money. Even though Gold cannot be fully consumed or doesn’t pay dividends, it is still considered as a profitable investment.
Why People Invest in Gold?
- Hedge Against Inflation
When countries print a lot of currency or go through an intense period where they lower market interest rates, the currency is devalued which leads to inflation. Gold is an asset class of its own and has an intrinsic value that does not get affected due to this inflation. Gold is the best investment when people lose their confidence during hyperinflation.
- Hedge Against Crisis
Gold also acts as a hedge against market crisis or uncertain conditions that cause the value of equities to fluctuate. These uncertainties lead people to invest in Gold since the beta of this metal is very low. It is a good metal to hold during tough market conditions as it can perform better than other investments during this period. This metal maintains the same value over a long period.
How to Invest in Gold in Singapore
- Physical Gold
Physical gold is sold to many investors in the form of coins or gold bars. You can store your gold in a safe deposit at a bank or home. However, you will have to be a little cautious while keeping gold at your home due to increased robberies. You can also purchase physical gold for investment purposes at various banks. Indigo Precious Metals group is a group of companies that trade in precious metal business and primarily focus on the physical delivery of investment-grade precious metals at the doorstep of customers. Even though they have predominance in Singapore and Malaysia, customers from any part of the world can purchase with a single click.
- Gold Certificates
Purchasing Gold certificates is similar to buying physical gold except you won’t have to carry those gold bars at home. You will be issued a gold certificate declaring that you own a certain amount of gold that can be easily exchanged for cash or gold.
- Gold Savings Account
Some banks allow you to open a gold savings account where you can purchase and sell gold without dealing with physical gold. The gold deposits will reflect in your account balance like a savings account.
- Gold-related ETFs
It works as you invest in any other commodities or stocks through an ETF. You can easily buy or sell your shares with the help of a broker or an online platform. You won’t have to deal with physical gold.
- Stocks in Gold-related Industries
Investing in Gold-related industries is not similar to any other industry. When the price of physical gold soar, the stock prices of Gold-related industries also increase. These include companies involved in gold exploration, gold mining, and gold production.
- Options, Commodities, and Forex
If you want to make quick money by trading in gold rather than holding it, you should invest in options, futures, and forex markets. For instance, forex traders benefit from tracking the price of gold against USD and other currencies.
Like any other investment, Gold can be a great investment if you want to diversify your portfolio.