While gold can be a valuable addition to an investment portfolio, it's crucial to separate fact from fiction. This post aims to debunk common gold investment myths by providing factual information and evidence-based arguments, shedding light on the realities of investing in gold.

Myth #1: Gold Does Not Have Good Investment Returns

Many investors believe that gold's returns are inherently inferior to those of stocks or ETFs. This misconception overlooks gold's historical growth and its role as a store of value. While it's true that gold may not always deliver explosive short-term gains, it offers consistent long-term value and acts as a powerful hedge against inflation and economic downturns.

For example, during periods of high inflation, gold prices have often risen significantly, preserving purchasing power. Looking at the gold returns in the last 10 years from sites like goldprice.org, the price of gold per gram has increased from around SGD $50 in 2015 to over SGD $150 today.

While steady returns and a hedge against inflation are its most valued qualities, gold also features often in discussions about diversification. Gold's role in a diversified portfolio lies in its low correlation with other asset classes. Its price movements often differ from stocks and bonds, providing a balance to higher-risk assets like growth stocks and ETFs, and a safety net during market turbulence.

Myth #2: Gold is Only for the Wealthy

The perception that gold is an exclusive asset for the wealthy is another common myth. In reality, gold is available in various forms and investment sizes to accommodate different budgets.

When it comes to the question of how to invest in gold, it’s important to recognise that investment avenues are greater than before. Popular avenues now include fractional ownership, gold ETFs, and varied denominations of bars and coins. Notably, entry-level investors can readily participate, with options like 1-gram gold bars and fractional shares requiring minimal capital.

In fact, investors in Singapore can kickstart their gold investment journey with the OCBC Precious Metals Account, allowing them to invest in gold amounts as low as 0.01 ounces, highlighting the low barrier to entry for gold investing.

Today, investors can purchase gold not only from traditional sources like banks and bullion shops, but also through modern investment apps, making it more accessible than ever. This ensures that anyone, regardless of their financial starting point or initial capital, can confidently begin building a gold portfolio.

Myth #3: Gold is Too Volatile

While gold prices can fluctuate in the short-term, it has historically demonstrated long-term stability and an upward trend. The reasons behind why gold fluctuates are manifold but can mostly be attributed to economic uncertainty, inflation, interest rate shifts, currency fluctuations and investor sentiment.

Despite short-term fluctuations, gold remains a stable long-term investment. In contrast to the stock market, where prices can swing wildly based on economic shifts, gold's price movements often exhibit a lower correlation with traditional assets like stocks and bonds, providing a reliable store of value over time.

This low correlation allows investors to diversify and reduce overall risk. Understanding when to invest in gold involves recognising its role as a hedge against economic uncertainty, not just seeking short-term gains.

Therefore, while short-term price swings are a reality, gold’s historical performance and low correlation with other asset classes result in long-term stability and counter the myth of excessive volatility.

 Gold Investment Myths Busted: What Every Investor Should Know

Myth #4: Gold is Difficult to Buy and Sell

The perception that gold is difficult to buy and sell is unfounded. There are various channels for buying and selling gold, including reputable online dealers, physical bullion dealers, some banks, and even pawnshops specialising in precious metals.

This diverse network ensures that gold’s liquidity remains beyond question. As an asset easily and readily traded on the global market, you can be sure that selling your gold holdings is a straightforward process, regardless of location. This ensures that investors can easily convert their holdings into cash when needed.

For new investors seeking reliable avenues to buy and sell gold, turning to authorised institutions is crucial. When selecting a reputable gold dealer, look for accreditations from recognised industry bodies, transparent pricing structures, and secure storage options if you intend to hold physical gold.

Reputable LBMA-approved dealers, such as Indigo Precious Metals, offer a secure and transparent trading environment, backed by longstanding reputations and adherence to stringent industry standards.

These dealers, alongside established online platforms and select banks, provide clear pathways for acquiring and liquidating gold assets.

The Golden Truth: Beyond the Myths

The myths of poor returns from gold investments, excessive volatility, and illiquidity often arise from a blend of outdated financial narratives and a lack of direct experience with the gold market.

Yet, as we've demonstrated, gold has proven its long-term value, is accessible to a wide range of investors, offers portfolio diversity and stability, and is readily traded on the global market with ease.

With these myths dispelled, investors can approach gold with a clearer, more informed perspective. For those in Singapore looking to capitalise on gold's investment prospects, Indigo Precious Metals stands as a trusted partner.

As we look to the future, gold remains not only a reliable hedge against uncertainty but also an essential asset in a rapidly evolving global economy—making it a cornerstone of any well-rounded investment portfolio.

Offering expert guidance and a secure avenue for acquiring gold bullion in Singapore, Indigo Precious Metals ensures your investment journey is both informed and successful. Contact us today for a free consultation on how to integrate gold into your investment strategy with confidence. Let our seasoned professionals guide you through the process, providing personalised solutions that align with your financial goals and risk tolerance.