Executive Summary

Gold has surged to repeated record highs, prompting investors to reassess its role in modern portfolios. While traditionally viewed as a hedge against crises, inflation, and monetary instability, its recent strong performance raises an important question: does gold still serve a useful purpose when prices already appear elevated?

The launch of the LionGlobal Singapore Physical Gold ETF (SGX: GLS/ GLU) in March 2026 adds a new dimension for Singapore investors. This article evaluates whether gold still makes sense in a long-term portfolio, and compares the new LionGlobal ETF with the established SPDR Gold Shares ETF across structure, liquidity, custody, and portfolio fit.

Bottom Line

Gold remains relevant as a diversifier and portfolio stabiliser, but not as an income-generating asset. Elevated prices do not invalidate its traditional role, though they make the case more dependent on investor intent rather than recent performance. The LionGlobal ETF is broadly similar to SPDR in economic exposure, but differs in custody location and insurance framing. SPDR retains advantages in liquidity, scale, and CPF accessibility, while LionGlobal may appeal to investors who prioritise jurisdiction and tail-risk considerations.

Key Terms and Definitions

Gold ETF: An exchange-traded fund that provides exposure to gold prices without requiring physical ownership. LBMA Gold Price AM/PM: Benchmark gold prices set in the London bullion market at different times of the day. Physical bullion exposure: The ETF holds actual gold bars rather than synthetic contracts. Custody: The arrangement governing how and where gold is stored. Allocated gold: Gold that is specifically set aside and identifiable for the fund. CPFIS / SRS: Singapore investment schemes that determine whether retirement funds can be used to purchase certain assets.

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Why Gold Prices Are Rising

Gold’s recent rally reflects a combination of structural and cyclical forces rather than a single trigger.

Central banks have been accumulating gold reserves at elevated levels, partly to diversify away from reliance on major fiat currencies. At the same time, geopolitical tensions and sanctions have increased demand for assets that are politically neutral and globally accepted.

Inflation concerns have also remained relevant. Even though inflation has moderated from peak levels, uncertainty around long-term monetary stability continues to support gold’s appeal as a store of value.

Another important shift has been the weakening reliability of traditional diversification. In recent periods of inflation stress, equities and bonds have declined together. This has led investors to revisit gold’s role as an alternative stabiliser within portfolios.

Taken together, these factors suggest that gold’s strength is not purely momentum-driven, but linked to deeper concerns about the resilience of the global financial system.

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Why Investors Hold Gold

Gold does not produce income. It does not generate earnings, pay coupons, or distribute cash flow. Its role in a portfolio is therefore defined by behaviour rather than yield.

Investors typically hold gold for four reasons: diversification, crisis protection, long-term purchasing power preservation, and independence from credit systems. Gold often behaves differently from equities and bonds, particularly during periods of financial stress, making it a potential stabilising asset.

It is also widely regarded as a safe-haven asset. When confidence in financial institutions or currencies weakens, demand for gold tends to rise. Over longer periods, gold has served as a hedge against inflation and currency debasement, especially in expansionary monetary environments.

For income-focused investors, however, this creates a clear limitation. Gold cannot function as a core holding because it does not contribute to portfolio income. Instead, it plays a supporting role — closer to portfolio insurance than a return engine.

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Does Gold Still Make Sense at High Prices?

High prices change how investors should think about gold, but they do not necessarily weaken its core purpose.

The strategic reasons for holding gold — diversification and protection — are not dependent on short-term valuation. These functions relate to how portfolios behave under stress, not whether gold appears cheap or expensive at a given moment.

However, elevated prices do affect the tactical decision. After a strong rally, forward returns may be less attractive, and investor behaviour can shift toward chasing momentum rather than managing risk.

The key distinction is therefore intent. Holding gold as a long-term hedge remains conceptually valid. Buying gold primarily because it has performed well introduces a different and less predictable risk profile.

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What Is the LionGlobal Singapore Physical Gold ETF?

The LionGlobal Singapore Physical Gold ETF is designed to track the LBMA Gold Price AM and provide exposure to physical gold through an SGX-listed vehicle.

The fund invests primarily in physical bullion, with most of the gold intended to be specifically set aside for the ETF. This means the gold is clearly identified for the fund rather than being part of a broader pooled claim.

Custody is arranged through Standard Chartered, while the gold is vaulted in Singapore by Malca-Amit. The intended expense ratio is approximately 0.39% per year, placing it broadly in line with existing gold ETFs.

On the surface, the structure is straightforward. It provides investors with access to gold price movements without the need to handle physical bullion directly.

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LionGlobal vs SPDR Gold ETF: Key Differences

While both ETFs provide exposure to gold, their differences lie more in structure than in economic outcome.

Feature	LionGlobal Singapore Physical Gold ETF	SPDR Gold Shares
Benchmark	LBMA Gold Price AM	LBMA Gold Price PM
Exposure	Physical bullion	Physical bullion
Expense ratio	~0.39%	~0.40%
Vault location	Singapore	London, New York, Zurich
Liquidity	New listing	Deep and established
CPF eligibility	SRS eligible	CPFIS and SRS eligible
Key strength	Local custody structure	Scale, liquidity, track record

SPDR’s advantages are clear in terms of liquidity, scale, and operating history. It remains the more established vehicle for straightforward gold exposure.

LionGlobal’s differentiation lies in its custody approach and local vaulting, which may be relevant depending on how investors think about gold’s role.

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Does Vault Location Matter?

For investors focused purely on price exposure, vault location is unlikely to matter significantly. Both ETFs should track the same underlying gold price over time.

However, for investors who view gold as a form of systemic insurance, custody location can become more relevant. If gold is held as protection against extreme financial or geopolitical disruptions, the jurisdiction in which it is stored may influence how investors perceive its reliability.

In that context, Singapore vaulting may feel more aligned with a defensive rationale for holding gold. This is not a financial advantage in the traditional sense, but a structural and psychological one.

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Liquidity, Insurance, and Accessibility

Liquidity remains an important practical consideration. SPDR benefits from deep trading volumes and a mature ecosystem of market participants. LionGlobal, as a new listing, may take time to develop similar depth, although market makers are expected to support trading.

The two ETFs also differ in how they approach custody and insurance. LionGlobal includes insurance coverage for risks such as loss or damage during custody and transit, though this does not extend to all possible scenarios. SPDR relies more on established custody systems within the global bullion market.

Accessibility is another factor. SPDR is currently eligible under CPFIS and SRS, while LionGlobal appears to be SRS-eligible but not yet CPFIS-eligible. This difference may influence investor preference, particularly for retirement accounts.

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How Gold Fits in a Dividend Portfolio

For income-focused investors, gold is unlikely to be a core allocation. It does not generate cash flow and cannot replace dividend-producing assets such as equities, REITs, or bonds.

However, as a small allocation, gold can still serve a role. It may provide diversification and act as a stabiliser during periods when traditional assets behave unpredictably.

The key is to view gold as a complement rather than a substitute. Its value lies in reducing portfolio fragility, not in generating income.

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Key Indicators to Monitor

Several factors will shape the ongoing case for gold.

The first is whether central-bank demand remains strong. Sustained accumulation supports the structural case for gold.

The second is geopolitical and macro uncertainty. Rising instability typically strengthens demand for safe-haven assets.

The third is inflation and monetary policy expectations. Persistent concerns around currency stability tend to support gold prices.

From a product perspective, LionGlobal’s trading liquidity and potential CPF eligibility will be important to monitor. These factors will determine how competitive it becomes relative to established alternatives.

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FAQ

1. Why do investors hold gold if it produces no income?
Gold is held for diversification, crisis protection, and long-term purchasing power preservation. It behaves differently from traditional assets and can help stabilise portfolios during periods of stress.

2. Does gold still make sense after reaching record highs?
It can, but the reason for holding it becomes more important. As a hedge, it remains relevant. As a momentum-driven investment, it becomes less predictable.

3. Is gold suitable for dividend investors?
Gold is typically a supplementary allocation. It does not generate income but may improve overall portfolio resilience when used in moderation.

4. What is the LionGlobal Gold ETF?
It is an SGX-listed ETF that provides exposure to physical gold, with bullion vaulted in Singapore and structured to track global gold prices.

5. How is LionGlobal different from SPDR Gold Shares?
The main differences are custody location, liquidity, and accessibility. SPDR is more established and liquid, while LionGlobal offers local vaulting and a different custody framework.

6. What does “gold set aside for the fund” mean?
It means the gold is specifically identified for the ETF rather than being part of a pooled claim, providing clearer ownership structure.

7. Why does vault location matter?
For most investors, it may not matter. For those concerned about systemic risks, jurisdiction and custody can influence how gold fits into their portfolio.

8. Is LionGlobal safer because it stores gold in Singapore?
Not necessarily. It offers a different custody approach, but both ETFs operate within the financial system and should be evaluated accordingly.

9. Which ETF is more liquid?
SPDR is currently more liquid due to its scale and long history. LionGlobal may take time to build similar trading depth.

10. How should investors choose between the two ETFs?
The choice depends on priorities. SPDR suits investors seeking liquidity and simplicity, while LionGlobal may appeal to those focused on custody structure and jurisdiction.

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Conclusion

Gold’s role in a portfolio has not fundamentally changed, even as its price has surged. It remains a non-yielding asset that can provide diversification and protection during periods of uncertainty.

The introduction of the LionGlobal Singapore Physical Gold ETF adds a new option for investors, but does not alter the underlying investment thesis. The more important question is not which ETF is better, but what role gold is intended to play within the portfolio.

If gold is viewed as a stabiliser or hedge, both ETFs can serve that purpose. The choice between them ultimately reflects investor priorities — whether those priorities lie in liquidity and scale, or in custody structure and jurisdictional alignment.

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