Investing In Gold ETF

Updated 02 June 2020

Gold - Does It Still Pay To Invest In Gold?

In my era of growing up, I was never accustomed to the concept that gold was fashionable as a jewellery. Occasionally, a Poh Heng or Tian Po advert would catch my eye for its design, but rarely do I view it seriously as an investment.

However, I came to realise the value of gold through traditions that have never died, for example, as betrothal gifts, wedding anniversary gifts, birth ritual gifts, birthday gifts, generation hand-me-down gifts. According to statista.com, China followed by India had the highest consumer gold demand in 2015. Wikipedia reported that there is presently a total of 183,600 tonnes of gold in existence above ground, as of 2014, which is equivalent to 9513 cubic metres. If you imagine, that's basically a 10m by 10m by 95m cube size. That's not much, isn't it? About 50% is in jewellery, 40% in investments and 10% in industry. Unlike investment in companies, this makes the precious metal highly unlikely to lose its value through generations.

What are ways that investors can invest in Gold?

1. Buying Gold Coins / Bullion
2. Buying Gold Jewellery
3. Investing in Gold Companies
4. Investing in Gold Mutual Funds
5. Buying Gold Futures
6. Investing in Gold ETFs

What are Gold ETFs?

To put it simply, a Gold ETF is a fund that tracks and reflects the price of gold. You do not actually own any gold by buying the ETF. It gives you the opportunity to gain from the prices of gold without physically owning the asset.

SPDR Gold Shares on Singapore Market

There are several Gold ETFs in the market. The one that is listed in Singapore is called SPDR Gold Shares.

On the platform, the stock name is "GLD US$" and the stock code is "O87".

Double-check that stock code is O87

Matthew DiLallo at The Motley Fool mentioned that SPDR Gold Trust is one of the three gold ETFs that really stand out.

SPDR Gold Shares is backed by physical gold, is liquid on the stock market, and trades the same way as ordinary stocks. It is possible to buy or sell throughout the day, contra the ETF and place market, limit and stop-loss orders. To know more, read its Fact Sheet and Prospectus here.

Some basic facts about trading SPDR Gold Shares on the Singapore market:

Base Currency: USD
Choose to settle in USD or SGD
Board Lot Size: 5 (ie. minimum quantity to buy)

How To Buy Gold ETF?

Online Trading Platform