The Gold and Silver Rush: Why I Am Not Joining The Queue Yet

Silver and Gold are having their moment to shine in 2025. Prices are climbing, and the headlines are screaming about the collapse of fiat currency and the safety of precious metals.

I have been pondering this question multiple times this week: "Should we be allocating some of our portfolio to Silver?"

Investing 101: Stacking Shiny Metals

If you want exposure to Precious Metals, you generally have three paths in Singapore:

  1. Physical Bullion/ Coins: Buying these physically from dealers like UOB or BullionStar. You hold it, you store it.
  2. Stock Market: Buying paper gold and silver on the stock exchange to profit from the price movements of metals. 
  3. Digital Gold and Silver: Dealers may allow you to buy fractional amounts of gold, silver and other precious metals, backed by real metal in their vaults. You have the option to redeem this digital metal for real bullion, typically with some minimum weightage like 100g of gold.
Precious Metals are hard assets that serve as another hedge against inflation and the debasement of fiat currency. There is real demand and industrial applications for these precious metals. Some suggest that supply-side issues will continue to drive the price of silver up.

The Dividend Investing Perspective

My issue with Gold and Silver is simply the lack of yield/dividends. 

If we buy a share of a bank, or a piece of real estate, or a plot of land, these assets print money and allow us to collect even more assets. We have a portfolio that breeds.

If we buy a 1kg bar of silver and put it in storage, we can come back in 10 years and still have just 1kg of silver. It pays zero rent. In fact, I am the one paying rent to store bullion in a secure location. 

Every dollar I lock up in precious metals is a dollar that does not net me cash yield in my investment portfolio. At my current stage in life where I am in an "Accumulation Phase" for my stocks portfolio, stacking Precious Metals needs to wait.

Other Issues With Buying Metals

One issue clearly highlighted above is the negative cash yield on holding metals. Stacking bullion can be satisfying, but it sucks up a lot of money that could be used on other things. If you use a safe deposit box, it will cost you an extra few hundred dollars a year. 

Bullion dealers also have to make money off their deals. When we buy gold bars and coins, we pay a premium that can be as much as 10-20% above spot price. When we want to sell our bars and coins for some money, we pay another premium around 5% or more below spot price for the dealer buying back our metal. Precious metals are investments that incur losses right off the bat and continue draining cash for storage, and we are betting that our capital gains offset these costs to turn a pretty profit. 

Stacking precious metals even as a casual hobby is difficult.  If you try to buy small amounts of physical bullion as a gift or a small savings vehicle, you are fighting heavily against logistics.

Conclusion

I am trying to build a cash flow machine, not a doomsday bunker. I treat Gold and Silver like insurance, not investments. You buy them when you are already rich and want to stay rich. You don't buy them to get rich.

For now, I will keep deploying serious amounts of capital into assets that pay me to own them. I do admit that Gold and Silver are nice to see and touch. When I have the budget to do so, I may buy a few coins and bars for myself and as gifts for my loved ones. 
Disclaimer: This article represents my personal views and portfolio actions. It is not financial advice. Please do your own due diligence before investing.

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