Gold has long been trusted as a reliable way to protect and grow wealth, especially in uncertain times. Today, it continues to serve as a powerful stabilising force, helping investors to stay grounded and confident when markets feel unpredictable.
For those building their wealth, gold can play these roles:
- Providing greater diversification to your investment portfolio
- Support long-term financial goals without requiring constant attention
In 2025, gold achieved over 50 all-time highs, delivering returns of over 60%1. The strong performance was driven by geopolitical uncertainty, a weaker US dollar, and demand from central banks and investors alike1.
The correction last October was a blip in gold’s long-term uptrend. Monetary debasement, uncertainty, and central bank reserve diversification continue to power its ascent. Physical gold offers investors a way to express the theme of scarcity in an environment of ample liquidity. DBS CIO’s target prices: 1H26: USD4,500/oz., 2H26: USD5,100/oz3.
This article breaks down how gold can support your journey toward greater financial autonomy, whether you're seeking stability, diversification, or tactical opportunities.
Understanding Gold’s Role in Your Strategy
1. When markets turn choppy, gold helps steady your portfolio
Gold has historically cushioned losses during periods of stress and uncertainty, giving investors room to stay focused on long-term plans rather than reacting emotionally. Because it often moves differently from equities and bonds (low correlation), adding gold can help balance equity-heavy portfolios and smooth overall performance without giving up growth ambitions.
2. When currencies fluctuate or inflation rises, Gold helps protect purchasing power
Gold has historically served as a reliable store of value, especially in times of monetary debasement and rising inflation.
In an environment where central banks continue to expand liquidity and geopolitical uncertainties persist, physical gold offers a way to express the theme of scarcity.
This protective quality helps to safeguard portfolio values against the erosive effects of inflation.
3. When cash earns nothing, Gold can preserve value
In environments where interest rates approach zero or turn negative, the value of holding cash diminishes. While today’s interest rates are all positive, understanding how gold behaves in different rate cycles allows you to make more confident decisions about liquidity vs long-term preservation.
Finding Your Path: Paper Gold vs Physical Gold
Gold strengthens portfolios in many forms. What matters is choosing the approach that aligns with your comfort level, goals, and desired involvement.
Most investors prefer ‘paper gold’ for its logistical convenience. 'Paper gold' refers to any asset that reflects the value of gold, or has its performance linked to gold. The investor doesn’t keep the physical gold itself.
Here are the main types:
1. Gold stocks
Stocks appeal to those comfortable with equity risks for potential dividends and growth, while ETFs suit hands-off investors prioritising liquidity and simplicity.
Gold stocks blend commodity exposure with equity upside, but require due diligence on management and operations.
Factors to consider:
- Operational efficiency. Lower production costs boost profitability, especially when gold prices rise.
- Profitability. Promising mine discoveries can deliver outsized returns.
- Availability of Dividends. Many established miners offer dividends, which appeals to income-focused investors.
2. Gold Exchange-Traded Funds (ETFs)
Gold exchange-traded funds (ETFs) offer a low maintenance, cost effective way to gain gold exposure, ideal for tactical allocations. They typically consist of:
- Shares in gold miners, refiners, or precious metal streaming companies
- Future contracts or physical gold bullion (though you won’t own the metal itself).
Why ETFs?
- Diversification: Over 100 global ETFs cater to varying strategies, from pure bullion exposure to leveraged plays.
- Liquidity: Trade like stocks, with real-time pricing and no storage hassles.
- Transparency: Physically-backed ETFs track gold prices closely, minimising tracking error.
3. Gold Unit Trusts
Gold-linked funds are also like a basket of gold-related investments, with the difference being that the contents are more actively curated by professional managers.
Ideally, these professionals would be able to get better returns than gold ETFs. The management fees for gold unit trusts tend to be a little higher.
Through your Wealth Management Account, you can compare these fees, and get a shortlist of positively-rated funds aligned with DBS’s investment views.
4. Gold-Linked Notes
Gold-Linked Notes (GLNs) can be a good investment if you expect gold prices to be stable or to increase. They are relatively short-term investments and can be tailored to your risk appetite in discussion with your banker or broker.
Before investing in GLNs, consider:
- Price expectations. If you expect gold prices to rise sharply, you can consider buying spot gold, which can be bought or sold at the current market price at any point in time.
- Impact of price changes. Gold prices can move quickly. While gold is a steady, safe-haven asset, its prices can still fluctuate.
- Currency risks. As gold is typically reflected in US dollars, you’ll have to consider foreign exchange fluctuations against the Singapore dollar.
How Gold-Linked Notes work
GLNs are like contracts signed between an investor and a banker (or issuer). Before investing in a GLN, both parties agree on the conditions such as the timeframe and the strike price, which is the agreed price to exercise the deal.
If the price of gold stays above the strike price within the agreed timeframe, you’ll receive your principal plus the agreed yield.
But if gold prices fall below the strike price after the agreed timespan, you will receive your principal and agreed yield in spot gold - converted at the strike price upon maturity - in return. This spot gold will be credited to your Wealth Management Account, and you can buy and sell it through your Relationship Manager. The fair value of your spot gold will be updated daily.
Taking the Next Step With Clarity
There are many ways to invest in gold without the complexities of physical ownership. By selecting the right tools (whether ETFs, stocks, unit trusts, or GLNs) you gain more control over how your wealth grows and stabilises.
Build toward financial autonomy with insights from DBS Treasures.
