Singapore Got Ahead of The U.S. Bank Meltdown. They Bought Gold.

Since the failure of Silicon Valley Bank on March 10, 2023, depositors have been on edge about whether their deposits are protected or not and whether their bank is sound or not. Contradictory messages from the U.S. Treasury, FDIC and the Fed have made things even more confusing.

Some investors simply want to get out of the banking system entirely and move to physical gold. The price of gold has soared from $1,818 per ounce on March 8, 2023 when the panic started, to $1,979 per ounce at the close on March 17. (Gold had gone as high as $1,991 per ounce on an intra-day basis on March 17.). That’s a 9% rally in the dollar price in just under two weeks as the crisis unfolded.

Investors who bought gold anywhere along the way have shared in that rally. Yet, there’s one investor who did even better, as described in this article. That investor is the Monetary Authority of Singapore (MAS), the central bank. MAS announced two weeks ago that they had acquired 44.6 metric tonnes of gold in January 2023.

When added to existing gold reserves, that bought the overall gold position of MAS from 153.8 tonnes to 198.4 tonnes. Both the January purchase and the overall position are massive. To put this position in perspective, there are only about 35,000 metric tonnes of gold held by all central banks and finance ministries in the world combined. Singapore now has 5.7% of that total.

The January acquisition moved Singapore from 29^th place to 26^th place among the top 100 gold-holding nations in the world. While retail investors in America seem indifferent to gold, the central banks have been buying it voraciously since 2010.

The scramble for gold among central banks has only become more frenzied in the past year. We’re constantly telling readers that central bank buying is an excellent bellwether for price movements.

Central banks can see financial crises coming before everyday investors. They find it in their best interests to buy gold ahead of panics instead of waiting until the crisis hits.

MAS bought their gold when it was priced in the low $1,800s. In U.S. dollar terms, they’ve already made 10% on their investment in three months. Of course, Singapore is not buying gold because of the banking crisis that just happened. They’re buying it in anticipation of the even worse crisis yet to come.

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