SINGAPORE – An OCBC Bank initiative to enable investors to buy and sell gold and silver has seen around $1 million worth of the precious metals traded since Oct 25, the bank said on Friday (Nov 5).
Investors can now instantly set up an account to trade gold and silver in real time in quantities as low as 0.01 ounces (0.28g) on OCBC’s mobile banking app. That amount of gold would cost about $25 while the silver would be 35 Singapore cents.
The bank said it is the only financial institution in South-east Asia providing this service.
The move aims to make it easier for investors to trade in precious metals by avoiding the costs and hassle associated with the logistics, storage and security that comes with owning the physical assets.
In the past, Singaporeans had to wait for several days before their account to invest in precious metals was approved or they had to visit a bank branch or retailer to buy physical gold bars and worry about where to store them securely.
Demand for precious metals has climbed since the coronavirus pandemic struck last year. The price of gold has risen 45 per cent since March last year while silver has shot up 60 per cent.
World Gold Council data shows that Singaporeans had traded around 2.7 tonnes of gold in the second quarter of 2021, up 125 per cent year on year.
Younger investors are taking an interest in gold too. Around 70 per cent of investors on the precious metals portfolio on OCBC RoboInvest – a service on the OCBC Digital app – are under 40.
Investments on the portfolio have risen at about 5 per cent month on month this year and continue to make up 5 per cent of overall monthly investments on the platform. Investments in precious metals on OCBC RoboInvest have grown 30 per cent year on year.
OCBC executive director of investment strategy Vasu Menon said buying gold is one way to protect investment portfolios as the precious metal often serves as a hedge against risks.
“Gold lacks credit or default risks and it is not linked to corporate fundamentals which may deteriorate. Gold prices tend to go up when interest rates go down along with a weak economy,” he noted.