• Higher interest rates and flexible deposit options
  • Real-time pricing
  • Lower investment amount with shorter tenors
What is a Gold PCI?
A PCI is a structure or customised investment product linked to USD paired with Gold (XAU). The tenor of this PCI can range from one week to three months with minimum investment amount of SGD30,000.

All you have to do:

Choose a base currency to pair against gold (XAU); it can be AUD, USD or SGD

  • Agree on a Target Conversion Rate (TCR) to be applied between the XAU-Currency Pair
  • Decide on your placement tenure

On maturity, you will get both the principal and coupon in either the base currency or XAU, depending on the exchange rate as compared to your chosen TCR.
This investment is ideal for you when

  • You wish to enjoy higher potential interest in either the base currency or XAU potentially above fixed deposit rates
  • Take advantage of gold strengthening against your currency deposit, which you can earn interest from
  • You seek superior real-time pricing, flexibility of tenor and control over your investments
  • You don’t mind holding on to gold when the XAU price declines below the TCR

On maturity, you will get both the principal and coupon in either the base currency / commodity, depending on the USD/Gold rate as compared to your chosen TCR.

Currencies Available

Let's assume you have funds of SGD100,000 and you don't mind holding XAU.

Let's say the Spot Rate between these SGD and XAU is SGD2,500. One possible Target Conversion Rate (TCR) is 2,475, and assuming SGDXAU does not go below 2,475 at fixing date, you will receive interest in SGD.

As you don't need the funds for the next month, you choose a one-month tenor.

At this stage, we will inform you of the guaranteed interest rate that you will enjoy. In this case, let's assume it is 7% p.a.

On Fixing Day (two business days before maturity), it will be determined whether your funds plus the guaranteed interest will be repaid in SGD or XAU.

Scenario 1 Scenario 2
Gold trades at SGD2,510 per troy ounce. As the
SGD weakens against gold, you'll get back your
principal + interest in SGD.

You therefore receive:
SGD100,000 + SGD (i.e. 7% / 12 of 100,000)
= SGD100,533*
Gold trades at SGD2,450 per troy ounce. As the
SGD strengthens against gold, you'll get back
your principal + interest in gold.

You therefore receive:
(100,000 + 533) / 2,450
= XAU41.03**

* Figure has been rounded to the nearest dollar.
** XAU denotes per troy ounce of gold and XAU figure has been rounded off to the nearest two decimal troy ounces of gold.

What are your available options if you are repaid in gold?

You can:

  • Hold on to it and wait for gold to appreciate in value.
  • Enter in another Commodity Linked Premium Currency Investment with gold as your Base Instrument to gain potentially higher returns.
  • Sell it off at the prevailing rate.

Useful Information

A Commodity Linked Premium Currency Investment (CPCI) is not a deposit but an investment product. Unlike traditional deposits, a CPCI has an investment element and returns may vary. The returns of a CPCI will be dependant, to at least some extent, on gold prices and on movements in specified currency exchange rates. A wide range of factors may affect the price of gold and currency exchange rates. Investments in gold are subject to price fluctuations which may provide both opportunities and risks. A CPCI involves an option exercisable by the financial institution, which confers on the financial institution the rights to repay the proceeds of the investment at maturity in either the base or alternative instrument, which can then be converted into a currency of your choice. No physical delivery or physical deposit or withdrawal of gold will take place. You should consider carefully whether any gold investment is suitable for you, in view of your investment objectives, financial means and risk profile. Investments in gold are not deposits.

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