Buy more as prices drop? Singapore retail investors line up to snap up gold.
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Despite a pullback of over 20% from last week’s record high, retail investors’ enthusiasm for buying gold has instead intensified against the trend.
According to media reports on February 2, the gold trading lounge at UOB’s headquarters in Singapore was crowded, with many investors lining up at the counter to purchase physical gold. The bank is the only financial institution in Singapore that offers physical gold products to retail customers. 70-year-old retiree Ng Beng Choo had been waiting for more than six hours after taking a number at 9:30 a.m., and said:
"Gold prices have dropped today, so I came to buy in."
This sell-off, which continued through Monday, once pushed the gold price down to around $4,400 per ounce, but there was no panic selling on the retail side. Instead, a significant “buy the dip” sentiment emerged. Analysts pointed out that this reflects continued long-term confidence in gold among retail investors, who generally believe that the core logic driving gold prices higher has not changed: On the one hand, there remains uncertainty over U.S. Trump administration policies; on the other, investors are still seeking assets to hedge against currency depreciation and sovereign bond risks, making gold’s “safe haven” appeal remain strong.
Physical Gold Shops See Buying Frenzy
According to media reports, the gold trading area at UOB’s headquarters in Singapore experienced unusual congestion. Due to surging customer demand, all products from world-renowned gold bar brand MKS PAMP SA sold out that day, and some later arrivals were unable to purchase physical gold. Notices had already been posted around the bank stating:
"Due to overwhelming response, all queue numbers for today’s purchases have been distributed. Thank you for your patience."
It was reported that similar scenes were unfolding in Sydney. Outside the ABC Bullion shop near Martin Place, queues stretched from inside the store out onto the street. A male investor in his twenties who identified himself only as Alex said that although he “lost quite a lot” on the market last Friday, he still chose to continue buying gold bars, adding “tomorrow will be a new day.” Even amid sharp price fluctuations, some retail investors still view physical gold as a long-term asset allocation, rather than a short-term trading target.
Market Logic Behind the Plunge
Spurred by the Trump administration’s reshaping of the geopolitical landscape and pressure on the Federal Reserve, among other macro factors, gold’s long-term rally accelerated significantly last month. However, there was a dramatic reversal in the market last Friday, with selling pressure continuing through Monday, and the gold price cumulatively pulling back more than 20% from its previous all-time high.
Bloomberg data shows that the plunge was mainly triggered by institutional traders simultaneously closing out previously crowded long positions. In stark contrast, retail investors generally saw the price pullback as an opportunity to build positions, and physical gold buying demand heated up against the trend in several markets.
Deutsche Bank reiterated its long-term target of $6,000 per ounce for gold in its report released Monday, emphasizing that the core logic behind the current gold rally, including policy uncertainty, sovereign credit risk, and the revaluation of currency values, has not fundamentally changed — a judgment that also underpins the sustained bullish sentiment among retail buyers.
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