Which country is best place to buy gold in Asia?
Based on exchange rates, Singapore and Thailand best place to buy gold
My colleague Tiong Hum wrote an article asking the interesting and poignant question “Long term gold investment: what if Singapore Dollar did not appreciate?” recently.
It turned out that Singapore’s policy to let the Singapore Dollar appreciate turned out to be a sweet deal for gold investors because it made gold cheaper. Question then: what about neighbouring countries in the region?
How much does gold cost in each currency?
We selected ten countries to make an apple to apple comparison.The inputs are:
- ‘Then’ exchange rate of currencies back on 01 January 2002.
- ‘Now’ exchange rate of currencies as of 07 May 2013.
- ‘Now’ price of gold also from as of 07 May 2013.
(Exclusive of Tax)
*The ‘Price of Gold’ in this table is held constant at USD1,472.37 to look at its price in each currency.
Singaporean and Thai investors are better off; gold investors in India are worse off
Based on this table, it is more expensive to buy gold in India today then it was 11 years ago. In the meantime, price in Hong Kong remained unchanged and it is best to buy gold in Singapore or Thailand.
What does this tell us?
- Singapore and Thailand are the best places to buy gold
- Singapore Dollar and Thai Baht appreciated against the US Dollar more than the latter’s fall in value versus gold
- Price of gold in Hong Kong remained unchanged because the Hong Kong Dollar is kept against the US Dollar between 7.75 and 7.85 in managed band by the Hong Kong Monetary Authority
- Gold investors are worse off in India because the Indian Rupee fell against the US Dollar but this is the very reason why Indians buy gold: as a store of wealth
Can foreigners come to Singapore to buy gold?
Non-Singaporeans! Before you book the next available flight to Singapore with cash filled suitcases looking to buy your own stash of Gold bullion, you would need to know the following.
- You are required to declare to customs if you are bringing cash exceeding the equivalent of SGD 30,000 in either physical currency and bearer negotiable instruments.
- You are exempted from Goods and Services Tax if you purchase your bullion from a bank. Read our article “Do I need to pay GST on Gold?” If you were to buy from other retailers, you may be charged a handling or workmanship fee that would make the purchase liable for GST.
- The only bank selling GST-exempt gold in Singapore is United Overseas Bank (UOB). If you are a foreigner buying gold from UOB, they do not accept cash. You are required to open an account with them and debit money from the account for the purchase.