How gold prices are set in Singapore
, 4 min read
Gold prices can look confusing. The news quotes one figure, a bullion dealer quotes another, and the jewellery shop down the road has a rate board with several more. They are all connected. Here is how a gold price travels from the international market to the counter in Singapore.
Step 1: the international spot price
Gold is traded around the clock on international markets. The spot price is the price for gold delivered now, and it is quoted in US dollars per troy ounce.
A troy ounce is not the ounce used for cooking. It is about 31.1 grams. The spot price refers to pure gold, and it moves throughout the day with currency markets, interest rates and demand from investors and central banks.
Step 2: from US dollars per ounce to Singapore dollars per gram
Shoppers in Singapore buy by the gram, in Singapore dollars. To get there, the spot price is:
- converted from US dollars to Singapore dollars at the current exchange rate, and
- divided by about 31.1 to get a price per gram of pure gold.
This means the Singapore price of gold can change even when the US dollar price does not, simply because the exchange rate has moved.
Step 3: adjusting for purity
The spot price is for pure gold. Jewellery is usually 916 (22K), which is 91.6% gold, so a gram of 916 contains less gold than a gram of 999. Its metal value is correspondingly lower. (If you want the details, see 916 or 999? Gold purity explained.)
Step 4: the local market premium
A shop's daily 916 rate is not simply spot price times 0.916. Physical gold sold over the counter in Singapore carries a local premium on top of the international figure. It reflects the cost of sourcing and refining physical gold, bringing it to market, and local demand. That is why the 916 rates you see around Little India sit above a figure worked out from spot alone, and why they move a little differently from the international price.
Step 5: workmanship on jewellery
When you buy a finished piece, you are paying for more than metal. Jewellery is also priced for the work that went into it: design, casting, hand finishing and setting. Depending on the shop, this may be shown as a making charge or included in the price of the piece. A plain chain involves less work than an intricate temple necklace, so the workmanship part of the price varies from piece to piece.
GST on gold in Singapore
At the time of writing, Singapore's Goods and Services Tax (GST) is 9%, and it applies to jewellery purchases from GST-registered businesses. Prices shown to consumers must include GST.
Investment precious metals are treated differently. Under IRAS rules, gold bars, ingots and wafers are exempt from GST when, among other criteria, they:
- are of at least 99.5% purity,
- can be traded on the international bullion market, for example by being produced by a refiner on the London Bullion Market Association's "Good Delivery" list, and
- carry a mark recognised as guaranteeing their quality, such as that refiner's hallmark.
Decorative or collector's bars do not qualify. Jewellery does not qualify either, whatever its purity. If you are buying gold purely as a store of value, this is one reason people choose bars rather than jewellery.
Buying rates are not selling rates
A shop quotes different rates depending on which way the gold is going:
- Selling rate: what you pay per gram when you buy.
- Buy-in rate: what the shop pays you per gram for your gold, in cash.
- Trade-in rate: what the shop credits you per gram when you exchange old gold towards a new piece.
The gap between them covers the shop's costs, including testing and refining gold it buys back. We explain buy-in and trade-in in selling or trading in old gold.
How to compare shops fairly
A few simple habits make comparisons meaningful:
- Compare like with like. A 916 rate should be compared with another 916 rate, on the same day.
- Check the date and time. Rates are usually set each morning, and older figures may be out of date.
- Ask what the rate covers. For jewellery, ask how workmanship is charged. For selling, ask whether any deductions apply.
- Look at the total. Weight × rate is the starting point. The final price on your receipt is what counts.
- Keep your receipts. They record the purity and weight you paid for, which helps when you sell or trade in later.
Why Minora publishes its rates every day
We think you should be able to see our prices before you walk through the door. Every day we publish our 916 selling rate, our cash buy-in rate and our trade-in rate on today's gold rate, alongside the Singapore market benchmark, so you can compare for yourself.
Visit us
Minora Jewels is a family-owned Indian gold jeweller at 142 Dunlop Street, Little India, serving Singapore since 1995. Check today's figures, then plan your visit: we are open daily, 10.30am to 9.30pm.
This article is general information, not financial or legal advice.