Gregor Gregersen, founder of The Reserve, a high-capacity vault for gold and silver storage in Changi, said some ultra-high-net-worth individuals are buying S$60-70 million (US$46-54 million) worth of physical gold.
“They’re saying, ‘I’d rather… get physical gold, put it in a safe place, and essentially reduce my risk’,” he said, as quoted by CNA.
The city-state’s demand for gold bars and coins rose 35% year-on-year to 2.5 tons in the first quarter, The Business Times reported, citing the World Gold Council.
This marked the highest growth for the quarter since record keeping began in 2010 despite the metal’s record run, with prices rising by 27% in the year to date and hitting highs of US$3,000 in March and $3,500 a month later.
Analysts attribute part of the surge to investors seeking to hedge against growing economic risks as increasing global uncertainty drives demand for safe-haven assets.
Shaokai Fan, head of Asia-Pacific and central banks at WGC, noted that the precious metal has consistently shown its resilience during times of instability.
The council added that local currency fluctuations were also a significant driver of growth.
“Currency moves across the region resulted in a local price performance that exceeded the US dollar gold price return, which made a more compelling case for investing,” it said.
However, gold jewelry saw a 20% year-on-year drop in demand in the first quarter, driven in part by the record-high prices.
Gold dealer Brian Lan explained that jewelry typically costs more due to labor costs involved in crafting and goods and services tax, which does not apply to investment-grade bullion.
These trends in Singapore reflect broader shifts across ASEAN markets, including Indonesia, Malaysia, and Thailand, where double-digit growth in investment demand was also accompanied by a decline in jewelry sales, according to WGC.
Looking ahead, analysts expect gold demand to remain strong in the mid- to long-term.
Louise Street, senior markets analyst at WGC, said central bank purchases and gold ETFs will continue to drive demand, but jewelry will likely stay subdued as high gold prices coupled with soft economic growth put pressure on consumer spending.
“Geopolitical and macroeconomic uncertainty should be prevalent themes this year, supporting demand for gold as a store of wealth and a hedge against risk,” Street added.
