All that Glitters Is Gold

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Back in September 2023, I wrote a post pondering whether it is time for me to start including physical gold and silver into my portfolio after watching the Channel News Asia documentary on the Singapore Reserves.  At that time, I think I should follow the footsteps of the smart monies, especially the Singapore reserves, to allocate a small percentage of my portfolio into physical gold and silver.  Initially, I was looking at adding 50 grams of gold into my portfolio per year, but later in January 2024, I changed my mind and decided to lower the allocation to buy 1 troy ounce (31.1 grams) of gold into my portfolio per year instead.  

In Singapore, there are many online and physical stores where physical gold can be purchased.  Personally I prefer to collect physical gold over paper gold.  There are many platforms where physical gold can be purchased, through United Overseas Bank (UOB), or through private dealers like Silver Bullion Singapore, GoldSilver Central and BullionStar.  For my first purchase, I decided to go with BullionStar because they were running some promotion in January 2024.  After opening the online account with them, I was gifted with 10 grams of silver for free.  Within one week of opening the account, I was notified of another promotion where I can get an 1 oz Canadian Silver Maple Leaf Bullion Coin for free upon purchase of certain gold products.  

As mentioned above, I decided to buy 1 oz of gold per year.  After sifting through the various gold products on BullionStar's website, I found that different brands of gold command a different premium over the spot price.  However, the resale price of all the 1 oz gold bars back to BullionStar is the same.  As such, I decided to go with the 1 oz gold bullion bar that commands the smallest premium over spot price, which is the "various London Bullion Market Association (LBMA) brand- preowned in good condition" bullion bar.  I did the purchase online when I was in Bangkok (to lock in the short term dip in gold price) with my mum and aunt, and only collected the physical gold bar and free silver coin 2 days later when I am back in Singapore.  I am glad with the service at the retail store and collection is a breeze.

Physical gold is a form of diversification for my portfolio, and definitely a long term asset allocation.  Recently, gold price has hit a new all time high of about SGD 2,940 per troy ounce (I always compare gold prices against SGD instead of USD as SGD is the base currency that I deal with), which is good news for me but quite meaningless for me as well because short term price volatility does not impact me much as I will only consider my next purchase next year, and probably consider selling only after 60 years old (as of 28th March, the price has risen to an all time high of SGD 2,988 per troy ounce).  However, I may consider to purchase through UOB next year, to see how different the experience will be, as the spread seems to be slightly better at UOB.  In the future, any rate cuts or money-printing may propel gold price to higher levels.  I believe all that glitters is gold, and it is good to allocate a small percentage of one's portfolio into this shiny precious metal!  Barista FIRE, here I come...!

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