• Early Europe trading on 20 Mar saw the spot Gold price trade at US$2,010 per ounce, up from ~US$1,830 per ounce on 8 Mar, and ~US$1,820 at the end of 2022. The recent bout of market uncertainty saw the price ratio spread of spot Gold to Brent Oil swing from 1 SD below the 3-month mean on 6 Mar, to two 2 S.D. above on 17 Mar.
   
• Higher volatility along with the of price gold revisiting US$2,000 per ounce has seen the SPDR® Gold Shares doubling its turnover for the 10 sessions since 9 March, to S$4.1 million a day (compared to Feb levels). The ETF also recorded average intra-day amplitudes of 105 bps or 1.05% in the month-to-date, which was 2.4x higher than the Feb average.
   
• SPDR® Gold Shares is the largest physically backed ETF across the globe, offering investors a relatively cost efficient and secure way to access the gold market. The dual currency trading functionality in both SGD and USD offers investors a means of participating in the gold bullion market without the necessity of taking physical delivery of gold, and foreign currency conversion for local investors.

The SPDR® Gold Shares ETF is cross-listed in Singapore and available to trade in two currencies - USD and SGD. The ETF is also included under the CPF Investment Scheme (CPFIS) - Ordinary Account and Supplementary Retirement Scheme (SRS). The objective of the SPDR® Gold Shares is for the ETF to reflect the performance of the price of gold bullion, less the Trust's expense ratio of 0.4% per annum. The Shares represent fractional, undivided interests in the Trust, with the primary asset currently consisting of 923 tonnes of gold securely vaulted in London. Since the debut of the USD counter in Singapore in Oct 2006, the ETF has generated an annualised return of 6.2% in SGD terms.

The minimum transaction size for the gold-focused ETF is 1 unit which is equivalent to the exposure of ~0.094 ounces of Gold. This means, for example sake, with the price of gold is at US$180.0, the minimum transaction action would be US$180.00 equivalent to the exposure of ~0.094 ounces of gold. To purchase close to 1 ounce of gold (~0.987 ounces), investors would need to purchase 11 units, equivalent to US$1,980.

Higher volatility along with the of price gold revisiting  the psychological US$2,000 per ounce barrier has resulted in SPDR® Gold Shares doubling its turnover for the last 10 trading sessions since 9 March to S$4.1 million a day (compared to February levels).

The LBMA Gold Price, used as an important benchmark throughout the gold market and acts as the underlying index for SPDR® Gold Shares ETF, briefly breached the US$2,000 level on 20 March. Increased selling activities followed from profit-taking investors between 20 and 21 March , with the ETF booking net selling of S$11 million in Singapore. The ETF’s SGD counter (stock code: GSD) was trading between the range of S$245 to S$250, testing S$250 levels during the day. Net purchases were observed on 22 March as the ETF’s SGD counter returned to S$241.10, clocking a decline of 3.2% since the 20 March close.

SPDR® Gold Shares also recorded an average intra-day amplitude of 105 bps or 1.05% in March, which was 2.4 times higher than its average in month of February. This means on average, a S$10,000 investment in the ETF, would swing on average S$105 between the daily high and low for the month to date.

The past week has seen several significant Central Bank announcements to support the global financial sector, culminating in the US Federal Reserve’s decision to lift its Fed Funds Rate by 25 bps to 4.75%-5.00%, as opposed to the widely expected 50 bps hike that carried as much as 80% expectations prior to 9 March. While the FOMC statement was more focused on inflation, than the Bank Term Funding Program established on 13 March with the FDIC, the first question of the press conference (FT’s Colby Smith) focused on the impact of the recent two weeks on its 22 March decision. The Chair held that while the US banking system is sound and resilient, recent developments in the US financial sector could, in principle, see a tightening of financial conditions, analogous to the impact to rate-hiking on households and businesses, thus weighing on demand while helping to curb inflation. The recent bout of market uncertainty has seen the price ratio spread of spot gold to brent crude oil swing from 1 standard deviation below the 3-month price ratio mean on 6 March, to two 2 standard deviations above on the 3-month mean on 17 March. On the Asia opening on 23 March, the 3-month price ratio between the two commodities was still at 2 standard deviations above on the 3-month mean.

The 10 ETFs listed for trading in Singapore that have booked the strongest total returns in the 2023 year to 21 March are tabled below.

Source: SGX (data as of 21 March 2023)