Singapore investors join gold rush as record-breaking rally continues

[SINGAPORE] Investors in Singapore have joined the global rush to buy gold since the start of 2025, as mounting geopolitical tensions and expectations of US interest rate cuts drive demand for the safe-haven metal.

Gold prices hit a fresh record high on Oct 13, driven by demand over reignited US-China trade tensions which drove Asia stock markets down. Silver also surged to another all-time high.

US President Donald Trump on Oct 10 imposed 100 per cent tariffs on Chinese goods to the US and announced new export controls on critical software effective from Nov 1 in response to China’s curbs on rare earth elements.

Spot gold was up 0.7 per cent at US$4,044.29 per ounce as at 10.53 am, after hitting an all-time high of US$4,059.30 earlier in the morning. To date in 2025, spot gold has soared 54 per cent, after a 27 per cent gain in 2024.

Spot silver jumped 2 per cent to a record high of US$51.52 an ounce, driven by similar factors as gold.

Gold rallies when interest rates are expected to ease because the precious metal becomes more attractive compared with interest-bearing assets.

Lower rates, as well as rising geopolitical uncertainty, also make the US dollar more volatile, raising gold’s appeal as a safe and more attractive store of value.

The US government shutdown, which hit its 12th day on Oct 12, has postponed the release of key economic indicators from the world’s biggest economy, raising the risk of higher unemployment and further economic disruption in the world’s largest economy.

That is expected to influence the US Federal Reserve’s next interest rate decision, as the US central bank adjusts rates based on inflation and unemployment.

The market is now pricing in a 25-basis-point cut at the Fed’s next monetary policy meeting on Oct 28 and 29, with an additional 25-basis-point cut anticipated in December, according to Bloomberg.

In an Oct 6 note, UOB head of markets strategy Heng Koon How noted that the recent rally in gold prices has been driven in part by a surge in retail demand globally for gold-related investment products, such as gold-backed exchange-traded funds (ETFs) and futures, on top of physical gold and gold certificates.

Retail investors in Singapore are among those who have raised their gold-related holdings. The SPDR Gold Shares ETF, which is listed in both Singapore and the US, has risen steadily since the start of 2025.

Other gold ETFs available to retail investors, such as iShares Gold Trust, abrdn Physical Gold Shares ETF and GraniteShares Gold Trust, which are listed in the US, have also risen.

Local investors have been increasing their exposure to gold-related stocks.

Shares of Singapore-listed gold miner CNMC Goldmine are up by more than 440 per cent year to date, rising from 26 cents in January to its current levels of over $1.30.

Shares of Hong Kong-listed Zijin Gold International, the international unit of China mining company Zijin Mining Group, have soared, more than doubling from their Sep 30 listing price of HK$71.59 to HK$146.50 on Oct 9. Singapore investors can invest in Hong Kong-listed stocks through their online brokers.

Demand in Singapore for tangible gold has grown amid market uncertainty, said UOB head of group global markets Kelvin Ng.

On average each month, Singapore investors bought 65 per cent more gold through UOB’s gold savings account between January and September than they did per month in 2024, while the amount of physical gold bought rose about 42 per cent over the nine months compared with last year, he said.

Ng added that demand has grown for gold certificates, which represents a way to invest in gold without physically holding it. This indicates “a growing preference among retail customers to store their gold with the bank”, he said.

UOB expects prices to continue rising in the months ahead.

Strong long-term drivers for gold, including a weaker US dollar and continued central bank buying, remain intact, Heng noted in his Oct 6 report. With retail demand surging, he expects gold prices to reach US$4,200 per ounce by the third quarter of 2026.

Other analysts predict that prices could go even higher. Carsten Menke, head of next generation research at Swiss private bank Julius Baer, on Oct 8 raised his 12-month target for gold to US$4,500 per ounce.

This is based on the assumption that investors will continue to hold 20 per cent to 25 per cent of their portfolios in gold, which is the global average, for the next three to five years.

Not to be outdone, US economist and president of Yardeni Research Ed Yardeni thinks gold prices could reach US$10,000 by 2028, Fortune reported.

“We are now aiming for US$5,000 in 2026. If it continues on its current path, it could reach US$10,000 before the end of the decade,” he said. THE STRAITS TIMES