The cost of holding gold has three parts: what you pay above the spot price to buy, what you lose below it when you sell, and what you pay each year to store and insure it. Our illustration shows S$10,000 in vaulted gold bars has to rise about 1.4% a year for five years just to get your money back, and about 3.9% a year to match money left at a 2.5% interest rate.
Gold pays no interest or dividends, so every dollar of return has to come from the price. Gold prices can fall as well as rise; past performance is not a guide. The World Gold Council’s own data show gold falling 42% from August 2011 to December 2015. This guide sets out the costs so you can see the bar the price has to clear.
The Three Costs of Holding Gold
- Premium (on the way in). Bars and coins cost more than their gold content. Small items carry bigger premiums per gram. See gold premiums explained.
- Spread (on the way out). Dealers and banks buy back below spot. See how to sell gold.
- Storage and insurance (every year). A vault or bank charges a percentage of value, often with GST at 9% and a minimum fee. See our gold storage guide for fees as at November 2026.
There is also the opportunity cost: the interest the same money could have earned. The CPF Ordinary Account pays a guaranteed minimum of 2.5% a year; T-bill and Singapore Savings Bond yields change with each issue, so look up today’s figure. Our comparison of T-bills, Savings Bonds and fixed deposits explains each.
The short version: one-off costs hurt most over short periods, and storage costs hurt most over long ones. Either way, gold has to rise by more than its costs, and by more than the interest you give up, before it pulls ahead.
Cost of Holding Gold: S$10,000 Over 1, 5 and 10 Years
Our illustration, not a forecast. We assume the gold price does not move at all, so the table shows costs alone. Assumptions, all ours:
- Vaulted bars: 3% premium to buy, 2% below spot to sell, storage of 0.35% a year plus 9% GST.
- Bank gold account: no premium, an assumed 2% gap between buying and selling price (UOB publishes daily prices, not a spread figure), and 0.25% a year plus GST, the service charge in our UOB Gold Savings Account review.
- Gold ETF: the 0.40% yearly expense ratio of SPDR Gold Shares only, before brokerage, the exchange spread and currency costs.
- Interest: 2.5% a year, compounded yearly.
| Held for | Vaulted bars | Bank gold account | Gold ETF (fee only) | At 2.5% interest |
|---|---|---|---|---|
| 1 year | $9,478 | $9,773 | $9,960 | $10,250 |
| 5 years | $9,334 | $9,667 | $9,802 | $11,314 |
| 10 years | $9,158 | $9,536 | $9,607 | $12,801 |
Figures are what you would have after selling, worked out with the same formulas as our gold investment return calculator.
How Much the Gold Price Has to Rise
The same assumptions, turned round: the yearly rise in the gold price needed to break even, and to match 2.5% interest.
| Held for | Vaulted bars: get money back | Vaulted bars: match 2.5% | Bank account: get money back | Bank account: match 2.5% |
|---|---|---|---|---|
| 1 year | 5.5% | 8.1% | 2.3% | 4.9% |
| 5 years | 1.4% a year (7.1% in all) | 3.9% a year | 0.7% a year (3.4% in all) | 3.2% a year |
| 10 years | 0.9% a year (9.2% in all) | 3.4% a year | 0.5% a year (4.9% in all) | 3.0% a year |
The 3.4% five-year figure for a bank gold account matches the example in our investing guide. Notice how the one-off costs dominate a one-year holding, while over ten years storage takes over: vaulted bars lose more value to fees in years 6 to 10 than the bank account does.
Gold ETFs: A Different Cost Shape
An exchange-traded fund holds gold for you and charges a yearly fee instead of storage. As at November 2026:
- SPDR Gold Shares on SGX charges an expense ratio of 0.40% a year. It trades as O87 in US dollars and GSD in Singapore dollars.
- LionGlobal Singapore Physical Gold ETF charges a management fee of 0.39% a year, and Lion Global Investors says it intends to cap the total expense ratio at that level.
You also pay brokerage on each trade and the gap between the buying and selling price on the exchange. A US-dollar counter adds currency risk. Our review of SPDR Gold Shares on SGX has the detail.
Keeping Holding Costs Down
- Buy larger units if you buy physical. Premiums per gram usually fall with size; compare quotes in the gold premium calculator.
- Hold for longer, or not at all. Round trips within a year cost the most.
- Check minimum fees. A monthly minimum can turn a small vault holding into a high percentage cost.
- Count GST on fees. Investment gold is GST-exempt, but storage and service charges usually are not.
What To Do Next
- Run your own numbers, including a fall in the gold price, in the gold investment return calculator.
- Get the premium, buy-back price and storage fee in writing before you buy.
- Compare the result with a guaranteed or fixed rate you could earn instead; our explainer on the CPF OA rate versus inflation is a useful reference point.
- Do your own due diligence. This is general information, not a recommendation to buy or sell gold.
