Why gold is dazzling investors

Less than 2km from Singapore’s luxurious Changi Airport sits a rather less glamorous business park. Residents of the industrial estate include freight and logistics firms, as well as the back offices of several banks. One building is a little different, however. Behind a glossy onyx facade, layers of security and imposing steel doors, sits more than US$1 billion (S$1.3 billion) in gold, silver and other treasures. Reserve SG hosts dozens of private vaults, thousands of safe deposit boxes and a cavernous storage room where precious metals sit on shelves rising three storeys above the ground.

After four years of retrofitting, the complex is almost complete. Its grand opening will come at an opportune moment: Gold is in the midst of an extraordinary renaissance. Over the past year, investors have piled into the metal, driving its price up by 38 per cent to over US$2,700 per troy ounce – a record high. The buzz has reached unusual places: Gold bars have hit the shelves of Costco, an American retailer, and CU, a South Korean convenience-store chain, as the resurgence of inflation and fears of war drive consumer enthusiasm. Central bankers are also getting involved, as financial fragmentation increases appetite for an ancient asset. The world has entered a new golden age.