A Comprehensive Case Study

Analysis of the 2025-2026 Precious Metals Surge

EXECUTIVE SUMMARY

Gold prices have experienced an unprecedented rally, breaking past $5,300 per ounce in January 2026, representing a 67% increase from 2024 levels. Singapore investors have actively participated in this historic surge, with gold bar and coin purchases increasing by 37% year-over-year to 2.2 tonnes in Q2 2025. This case study examines the situation, market outlook, investor solutions, and broader economic impact of the gold rally on Singapore’s financial ecosystem.

Key Highlights Gold reached $5,300+ per ounce in January 2026, up 67% from 2024Singapore investors increased gold purchases by 37% YoY to 2.2 tonnes in Q2 2025Monetary Authority of Singapore reduced gold reserves by 10 tonnes YTD 2025SPDR Gold Shares ETF attracted S$309 million in net inflows through June 2025Gold jewellery demand declined 8% in Singapore as prices surged

1. SITUATION ANALYSIS

1.1 Global Context and Price Movement

Gold entered 2026 with exceptional momentum, breaking past $5,300 per ounce on January 28, 2026, following a stellar 2025 performance where prices surged 67%. The rally represents one of the strongest bull runs in precious metals history, with gold posting gains for five consecutive months through December 2025.

Key Price Milestones:

December 23, 2025: Gold reached $4,449/oz, capping 67% annual gains
January 12, 2026: First record high of the year above $4,600/oz
January 28, 2026: Broke through $5,300/oz amid dollar weakness
Singapore dollar price: SGD 5,572.09 per ounce (up 53.95% year-over-year)

1.2 Primary Drivers of the Rally

Dollar Weakness

The U.S. Dollar Index dropped to a four-year low in January 2026 after President Trump indicated comfort with a weaker currency. This dollar depreciation created a powerful tailwind for gold, as the precious metal becomes more attractive to international buyers when priced in weakening currencies. Morgan Stanley analysts identified dollar weakness as a key “additional tailwind” supporting continued gold appreciation.

Central Bank Demand

Global central banks have been aggressive buyers, purchasing over 1,000 tonnes annually in recent years compared to 400-500 tonnes in the previous decade. According to World Gold Council surveys, 95% of central banks expect to increase their gold reserves over the next 12 months, driven by diversification strategies and concerns about U.S. debt sustainability.

However, at elevated price levels, some central banks have begun taking profits. Notably, the Monetary Authority of Singapore reduced reserves by 10 tonnes year-to-date through May 2025, joining Uzbekistan as net sellers during the rally.

Geopolitical Uncertainty

Escalating geopolitical tensions provided persistent safe-haven demand. Venezuela confrontations, Iran instability, and ongoing concerns about global trade conflicts reinforced gold’s appeal as portfolio insurance. Each geopolitical flashpoint prompted renewed investor interest in traditional haven assets.

Monetary Policy Expectations

The Federal Reserve is expected to cut interest rates twice in 2026, reducing the opportunity cost of holding non-yielding assets like gold. As rates decline, gold becomes more competitive relative to interest-bearing alternatives such as bonds and savings accounts. This monetary backdrop supported sustained investor inflows into gold ETFs and physical holdings.

1.3 Singapore Investor Behavior

Retail Investment Surge

Singapore investors demonstrated strong appetite for gold investment products in 2025:

Gold bar and coin purchases surged 37% YoY to 2.2 tonnes in Q2 2025
SPDR Gold Shares ETF attracted S$309 million in net inflows by June 2025
UOB reported 65% higher average monthly gold purchases through savings accounts in first three quarters of 2025
Physical gold purchases through banks increased 42% YoY
Growing preference for gold certificates as investors chose bank storage over home custody

Shift from Jewellery to Investment

Record-high prices fundamentally altered consumer behavior. Gold jewellery demand in Singapore declined 8% to 1.5 tonnes in Q2 2025, reflecting price sensitivity among consumers. This shift highlighted a transformation in gold’s perceived role—increasingly viewed as a financial instrument for wealth preservation rather than primarily a decorative item.

ETF and Equity Exposure

Singapore investors gained gold exposure through multiple channels:

SGX-listed ETFs: SPDR Gold Shares (O87/GSD) emerged as the most popular Singapore-listed ETF by inflows
U.S.-listed ETFs: iShares Gold Trust (IAU), abrdn Physical Gold Shares ETF, GraniteShares Gold Trust
Gold mining stocks: Increased retail interest in senior producers like Newmont and Barrick Gold
Digital platforms: Brokerages like Moomoo, Tiger Brokers, and Interactive Brokers reported increased gold-related trading

2. MARKET OUTLOOK

2.1 Major Bank Forecasts

Leading financial institutions maintain bullish outlooks for gold through 2026 and beyond, though expectations vary on magnitude and timing:

Institution	2026 Forecast	Key Drivers
J.P. Morgan	$5,055/oz Q4 2026 $6,000/oz by 2028	Central bank buying, ETF inflows, dollar diversification
Goldman Sachs	$4,900/oz Dec 2026	Western ETF demand, sustained central bank purchases
Morgan Stanley	$4,800/oz Q4 2026	Central bank demand, supportive monetary backdrop
Bank of America	$5,000/oz in 2026	U.S. fiscal deficits, dollar softness, central bank buying
Citigroup	$5,000/oz Q1 2026	Investment demand, geopolitical risks

2.2 Bullish Factors

Continued Central Bank Accumulation: 95% of central banks surveyed expect to increase reserves in the next 12 months, with quarterly demand projected at 585 tonnes
ETF Inflows: Forecasted 250 tonnes of ETF inflows in 2026, with bar and coin demand exceeding 1,200 tonnes annually
Institutional Under-Allocation: Pension funds and superannuation funds remained under-allocated to gold in 2025, expected to increase exposure in 2026
De-dollarization Trend: Gold’s share of central bank reserves eclipsed U.S. Treasurys for the first time since 1996 as of September 2025
Monetary Easing Cycle: Expected Fed rate cuts reduce opportunity cost of holding non-yielding assets
Currency Debasement Concerns: U.S. national debt approaching $38 trillion drives gold demand as hedge against purchasing power erosion

2.3 Bearish Risks

Near-Parabolic Rally: HSBC warns the steep ascent invites volatility and profit-taking on any positive news
Central Bank Selling: Some banks like MAS have reduced reserves at elevated prices to realize profits, potentially signaling trend exhaustion
Slowing Chinese Demand: People’s Bank of China has tempered purchases; further slowdown could trigger leveraged position unwinding
Easing Geopolitical Tensions: Peace conversations in Ukraine and Gaza ceasefire through early January could reduce safe-haven premium
Index Rebalancing: Bloomberg Commodity Index reduced gold allocation from 20.4% to 14.9%, potentially forcing passive selling
High Bond Yields: Persistent elevated yields maintain competition for investor capital despite rate cut expectations

2.4 Singapore-Specific Outlook

Singapore’s gold market outlook reflects both global dynamics and local economic conditions:

Currency Strength: The Singapore dollar reached 11-year highs against the USD in January 2026, providing local investors with enhanced purchasing power for dollar-denominated gold
Low Inflation Environment: MAS forecasts core inflation of 0.5-1.5% in 2026, maintaining Singapore’s appeal as a stable investment hub
Regional Safe Haven: Singapore’s status as Asia’s premier financial center positions it to benefit from regional gold investment flows
Retail Demand Sustainability: Question remains whether 37% YoY growth in investment gold purchases can continue at current elevated price levels

3. INVESTOR SOLUTIONS & STRATEGIES

3.1 Physical Gold Investment

Direct Ownership Options

UOB Gold Counter: Purchase investment-grade bars at the UOB Main Branch with transparent pricing
Indigo Precious Metals: Singapore’s trusted bullion dealer offering segregated vaulting with no counterparty risk
Singapore Mint: Lion Bullion range of investment-grade gold bars launched in response to increased demand
Gold Savings Accounts: UOB reported 65% higher monthly purchases through gold accumulation programs in 2025

Advantages: Direct ownership, no management fees, tangible asset, GST-exempt in Singapore

Disadvantages: Storage costs, insurance requirements, liquidity constraints, premium over spot price

3.2 Exchange-Traded Funds (ETFs)

ETF	Ticker	Expense Ratio	Exchange	CPF/SRS
SPDR Gold Shares	O87 / GSD	0.40%	SGX	Yes
iShares Gold Trust	IAU	0.25%	NYSE	No
abrdn Physical Gold	SGOL	0.17%	NYSE	No
GraniteShares Gold	BAR	0.17%	NYSE	No

ETFs offer the most accessible and liquid gold exposure for Singapore investors. The SPDR Gold Shares ETF on SGX is particularly attractive for retirement planning as it qualifies for both CPF-OA and SRS investments.

3.3 Gold Mining Stocks

Senior Mining Companies (Lower Risk)

Newmont Corporation (NEM): World’s largest gold producer with diversified operations
Barrick Gold (GOLD): Major producer with dividend payments and proven reserves
AngloGold Ashanti (AU): Established mining company with global presence

Mining stocks offer leverage to gold prices—when gold rises, mining profitability typically increases disproportionately. However, they carry operational risks, management risk, and political risk in mining jurisdictions.

3.4 Digital Investment Platforms

MAS-regulated brokerages provide convenient access to gold investments:

StashAway: ETF Explorer allows gold portfolio allocation with flat $1 USD per transaction
Moomoo, Tiger Brokers, Interactive Brokers: Access to U.S. and Singapore-listed gold products
FSMOne, Saxo Markets: Comprehensive platforms for ETFs and stocks
CMC Invest: Commission-free trading on select gold ETFs

3.5 Portfolio Allocation Strategies

Expert recommendations for gold allocation vary based on investment objectives:

Conservative Allocation: 5-10% of total portfolio in gold as inflation hedge and portfolio diversifier
Moderate Allocation: 10-15% for investors seeking stronger protection against currency debasement
Aggressive Allocation: 15-20% for those with strong conviction in continued monetary expansion

Critical consideration: At current elevated prices, dollar-cost averaging is recommended over lump-sum investment to mitigate timing risk. Regular monthly investments help smooth out volatility inherent in a near-parabolic rally.

4. ECONOMIC IMPACT

4.1 Impact on Singapore Economy

Financial Services Sector

The gold rally has significantly boosted Singapore’s financial services industry:

Banks: Increased gold-related business through savings accounts, certificates, and physical sales
Brokerages: Higher trading volumes and assets under management from gold product demand
Wealth Management: Enhanced advisory services around precious metals allocation
Vault Services: Growing demand for secure storage solutions for physical holdings

Retail and Consumer Sector

The jewellery industry experienced headwinds from elevated prices:

Jewellery Demand: 8% decline in Q2 2025 as consumers reduced discretionary gold purchases
Retail Margins: Jewellery retailers faced compressed margins on higher input costs
Wedding Market: Traditional gold wedding jewellery purchases impacted by price sensitivity
Gift Market: Reduction in gold as gift items for festivals and celebrations

Currency and Monetary Policy

The interplay between gold and Singapore’s currency dynamics:

SGD Strength: The Singapore dollar appreciated to 11-year highs, providing relative purchasing power advantage
MAS Reserves Management: Strategic reduction of 10 tonnes from gold reserves represented profit-taking at favorable prices
Inflation Mitigation: Strong SGD helped offset some imported inflation pressures despite global commodity price increases
Reserve Diversification: MAS maintains around 205 tonnes of gold (worth approximately $4.3 billion as of December 2025)

4.2 Impact on Households

Wealth Effects

Positive: Households holding gold from pre-2024 realized significant paper gains, enhancing perceived wealth
Positive: Retirement accounts with gold ETF allocations benefited from portfolio appreciation
Negative: New buyers at elevated prices face higher entry costs and reduced future return potential
Negative: Jewellery as traditional wealth store became less accessible for middle-income families

Purchasing Power Considerations

While gold prices surged, Singapore’s low inflation environment (0.5-1.5%) and strong currency partially insulated residents from broader purchasing power erosion seen in other markets. However, the weaker U.S. dollar, though beneficial for gold, poses implications for:

Import Costs: Some dollar-denominated goods became cheaper for Singaporeans
Overseas Education: USD-priced university fees became more affordable
Travel: U.S. travel costs declined relative to Singapore income levels

4.3 Regional Financial Hub Impact

Singapore’s position as Asia’s premier financial center amplified gold’s significance:

Asset Management: Increased allocation to gold-related products across regional portfolios managed from Singapore
Trading Infrastructure: Enhanced liquidity in gold derivatives and physical markets
Safe Haven Capital Flows: Reinforced Singapore’s status as destination for defensive capital during uncertainty
Industry Events: Asia Gold Conference scheduled for September 2026 highlights Singapore’s role in precious metals ecosystem

4.4 Global Context: De-dollarization Trend

The gold rally reflects a broader structural shift in global reserve management. Morgan Stanley research revealed that gold’s share of central bank reserves surpassed U.S. Treasurys for the first time since 1996 as of September 2025. This milestone represents a fundamental recalibration of international monetary system confidence.

For Singapore, this trend reinforces the strategic importance of maintaining diversified reserves and nurturing the financial infrastructure that supports gold trading, custody, and investment. As global central banks continue diversifying away from traditional reserve assets, Singapore is well-positioned to serve as a trusted intermediary and secure hub for precious metals activity.

5. CONCLUSION

The gold rally of 2025-2026 represents a watershed moment in precious metals markets, driven by a confluence of dollar weakness, central bank diversification, geopolitical uncertainty, and expectations of continued monetary easing. Singapore investors have actively participated in this historic surge, with investment demand increasing 37% year-over-year while jewellery consumption declined.

Looking ahead, most major financial institutions project continued strength in gold prices through 2026, with forecasts clustering between $4,800 and $6,000 per ounce. However, the near-parabolic nature of the rally introduces heightened volatility risks and the potential for profit-taking corrections.

For Singapore investors, the key is maintaining appropriate portfolio allocations based on individual circumstances while recognizing gold’s dual role as both inflation hedge and safe-haven asset. The availability of multiple investment vehicles—from physical bullion to ETFs to mining stocks—provides flexibility in implementation.

The broader economic impact extends beyond individual portfolios to Singapore’s role as Asia’s financial hub, reinforcing its position in the global precious metals ecosystem while navigating the complex dynamics of currency strength, reserve management, and shifting international monetary relationships.

Key Recommendations for Singapore Investors Maintain 5-15% portfolio allocation to gold as insurance, not speculationUse dollar-cost averaging to mitigate timing risk at elevated price levelsConsider CPF/SRS-eligible products like SPDR Gold Shares ETF for tax efficiencyAvoid over-concentration; gold should complement, not dominate portfoliosMonitor central bank behavior for signals of demand sustainabilityPrepare for volatility; near-parabolic rallies invite sharp correctionsRebalance periodically to maintain target allocation as prices fluctuate

GOLD RALLY IN SINGAPORE