Singaporeans flock to gold despite record-high prices ahead of Chinese New Year

[SINGAPORE] Festive demand for gold ahead of Chinese New Year has taken a backseat, with wealth preservation – rather than gifting – becoming the primary driver for bullion buyers this year.

The yellow metal has climbed around 70 per cent year on year, fuelled by strong demand from both institutional and retail investors amid heightened geopolitical uncertainty. Gold peaked near US$5,500 per ounce in January and was transacting around US$4,900 per ounce in early trading on Friday (Feb 13). 

A shift in strategy

Oriano Lizza, sales trader at CMC Markets Singapore, noted that while Chinese New Year typically brings a seasonal uptick in physical gold buying for gifting, higher gold prices are likely to shift buyer intent towards wealth accumulation and preservation.

“I would suspect at a minimum that gold demand will stabilise, if not increase, due to its dual-purpose upside,” said Lizza.

He added that the price surge has created a “dislocation” between jewellery premiums and those for gold bars. This has led to an increased appetite for bars and coins which can be slowly accumulated over time in smaller tranches.

The shift is visible on the ground. Tan Gwee Khiang, a 67-year-old retiree, told The Business Times that he recently pawned his gold jewellery and used the cash to buy bullion bars instead.

“I consider both the spot price and the premium when buying bullion. This is why I’m opting for bars and coins over jewellery,” said Tan. 

Rise of the first-time buyer

The safe haven appeal is also attracting new participants.

First-time buyer Sarifah Ahmad, 62, said: “I would rather put my money into gold than let it sit idle in the bank because over time, cash loses value.”

A spokesperson from BullionStar said the company’s orders between December 2025 and January 2026 increased by around 190 per cent compared to the same period last year.

The local precious metals dealer’s revenue has also jumped by over five times year on year over the same period. January 2026 was the busiest month in BullionStar’s history with over 11,000 purchase orders, said the spokesperson.

“During busy periods like this, there is a higher proportion of first-time buyers who have seen precious metals making headlines,” added the spokesperson.

The bullion dealer observed that first-time buyers typically favour smaller denominations – ranging from 10 grams to one ounce for gold.

For silver, the most popular entry points are one ounce silver coins and 1 kg silver bars, with most buyers purchasing multiple units, noted the spokesperson.

At BullionStar, more experienced investors tend to gravitate towards 50 gram and 100 gram gold bars, or established one ounce gold coins such as the Canadian Maple Leaf and Britannia. On the silver side, they typically acquire multiples of 1 kg bars or 100 ounce bars.

The precious metals dealer has also seen increasing uptake of 1 kg gold bars and 1,000 ounce silver bars. 

“Across all denominations, the prevailing trend is clear: investors continue to accumulate, with buy orders significantly outpacing sell orders,” said the BullionStar spokesperson.

The surge in interest has been so significant that UOB – the only Singapore bank selling physical gold bars and coins – announced new operating measures to manage customer queues.

Retailers

While investment demand dominates, jewellery retailers are also benefiting.

Shares of Singapore Exchange-listed retail gold players have advanced significantly since the start of the year.

MoneyMax jumped more than 80 per cent year to date, while Taka Jewellery climbed more than 50 per cent over the same period. Meanwhile, Aspial Lifestyle , owner of jewellery chains Lee Hwa and Goldheart and pawnbroker Maxi-Cash, rose more than 30 per cent since the new year. ValueMax is also more than 20 per cent higher since the start of the year.

Carmen Lee, head of equity research at OCBC, noted that gold’s strong performance this year could lift earnings for these companies, given that they typically have substantial gold inventory holdings compared to other assets such as diamonds.

Yeah Lee Ching, managing director, retail and trading, at ValueMax, said that while demand from walk-in traffic has improved compared to previous years, the mix of what people are buying is changing.

She noted that demand for investment-grade gold bars, such as PAMP Suisse bars, is on the rise, requiring more frequent restocking. Meanwhile, sales of 916 gold jewellery, which is lower in purity, still outpaces 999.9 LBMA gold bars. The numbers denote purity – 916 is 91.6 per cent gold, while 999.9 is near pure.

Lim Chun Seng, group general manager of MoneyMax, noted that the gold gifting segment is seeing increased demand this year, particularly for gifts such as gold key chains or mini gold bars.

Looking ahead, CMC’s Lizza expects a slight decline in jewellery manufacturing, or a shift towards simpler, more cost-effective pieces being commissioned to offset higher raw material costs.

Where are gold prices headed?

Even as physical buying surges, analysts caution that higher prices and price swings could prompt consumers to adopt a more measured approach.

Vasu Menon, managing director of investment strategy at OCBC, noted: “Elevated prices and sharp fluctuations tend to make consumers more hesitant, even though some buyers continue to view gold as a long‑term hedge rather than just a traditional purchase.”

Meanwhile, the long-term sentiment among institutional players remains bullish. Heng Koon How, head of markets strategy at UOB, reiterated a positive outlook.

The bank forecasts gold to rise to US$5,400 per ounce by the fourth quarter of this year.

“Despite our positive long-term outlook, it is important to appreciate risks of further near-term volatility,” said Heng. “Given the outsized speculative positioning that had been accumulated in the recent run-up, a further near-term sell-off in gold from the ‘stale bulls’ cannot be ruled out.”