To own gold, silver, or other precious metals in Singapore as a form of savings or investment, one can either buy
1) certificates (or paper gold)
2) ETF or trading in companies that mine or deals with precious metals. (technically you do not own the gold or metal itself, but movement in the companies would be linked with spot prices)
3) Physical ownership of the precious metal
In this post, we will talk about ownership of paper certificates of precious metals.
This is actually the more common and usual way of owning precious metals.
For example, you buy a certificate from dealers that states that you have a specific amount of gold. The real physical gold is actually not delivered to you. It is a promise.
When the spot prices of gold rises and you sell the certificate to another dealer, you will get the value of the gold. It is "as good" as owning the physical gold itself.
However, the gold certificate is backed up only by the financial institutes that issues the certificate. In other words, it is as good as the "promise" of the bank.
After Lehman Brothers, your trust in the financial system is as good as mine.
In fact, here is a good link to understand paper gold vs physical gold.
If you are lazy to read, basically
There are 100 times trading in paper gold, than the amount of physical gold in existent. Personally, I have no problem with that, as this is how modern financial system works. A bank owning $1 in deposit can create $100 of loan amount.
However, there are many who are uneasy with the large ratio and prefer to own physical gold. A quick google check will turn up many sceptics of the trading system.
Do note that this is the easiest and quicker way to trade in precious gold, especially when you are dealing with large quantities. Imaging the security and risk of hauling a 10 kg gold bar back home and keeping it secured at home. =D
(though I would love the challenge)
1) certificates (or paper gold)
2) ETF or trading in companies that mine or deals with precious metals. (technically you do not own the gold or metal itself, but movement in the companies would be linked with spot prices)
3) Physical ownership of the precious metal
In this post, we will talk about ownership of paper certificates of precious metals.
This is actually the more common and usual way of owning precious metals.
For example, you buy a certificate from dealers that states that you have a specific amount of gold. The real physical gold is actually not delivered to you. It is a promise.
When the spot prices of gold rises and you sell the certificate to another dealer, you will get the value of the gold. It is "as good" as owning the physical gold itself.
However, the gold certificate is backed up only by the financial institutes that issues the certificate. In other words, it is as good as the "promise" of the bank.
After Lehman Brothers, your trust in the financial system is as good as mine.
In fact, here is a good link to understand paper gold vs physical gold.
If you are lazy to read, basically
It has been said that as much as 99x as much “paper” or digital gold is bought on commodities exchanges such as COMEX, as there is traded in actual delivery of physical gold.
There are 100 times trading in paper gold, than the amount of physical gold in existent. Personally, I have no problem with that, as this is how modern financial system works. A bank owning $1 in deposit can create $100 of loan amount.
However, there are many who are uneasy with the large ratio and prefer to own physical gold. A quick google check will turn up many sceptics of the trading system.
Do note that this is the easiest and quicker way to trade in precious gold, especially when you are dealing with large quantities. Imaging the security and risk of hauling a 10 kg gold bar back home and keeping it secured at home. =D
(though I would love the challenge)
In Singapore, the easiest way to buy these paper gold or silver is via opening an UOB Gold Saving Account and/or Silver Account.
In owning these gold/silver Saving Account, UOB does not back your saving accounts with real physical precious metals. They just back it up with a promise. It depends on the bank's financial strength and reputation.
This girl does not work at UOB Bank.
This girl does not work at UOB Bank.
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