Gold Premium Currency Investment
Gold Premium Currency Investment offers higher interest rates and potential gains from gold price movements.
Choose a base currency to pair against gold (XAU); it can be AUD, USD or SGD
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
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.
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)
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
* 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.
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.
Our Premium Currency Investments offer you greater control and potentially higher yields. More details»
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