I bought some gold via CIMB gold account last year in September. It was my first time as I have never invested in gold before. I was worried of course because it was something very new for me but I went ahead as I were buying very little. Even if the price it goes up by 10%, at most I can treat my wife to a buffet dinner. I figured it is still better than buying gold jewellery which is more expensive plus the storing it safely is a concern too. With the current market volatility caused by economic growth instability for most countries in the world, gold has suddenly gained lots of attention.
When there are lots of investment possibilities, gold tend to take a backseat. Today, with much of the world shrouded in uncertainty, gold prices have been on an uptrend. According to Head of Ambank Research Anthony Dass in an article in Starbiz, gold is often perceived as a “safe haven” asset with liquidity. It is not dependent on any monetary authority or economic policy and so is almost entirely intervention-risk free. I would personally prefer stocks over gold anytime because one is something I can comprehend and understand. Meanwhile property investment is something I have some knowledge in and thus could make a better decision. With gold, it’s almost nothing that I could rely on except articles after articles with differing opinions.
So, what has happened? Well gold prices are up 26 percent in 2016 and is currently at U$1,349 per ounce levels. With a potential global recession, it may not be possible for the US Federal Reserve to raise interest rates and this is one main reason why Ringgit has also strengthened recently. Theres even some predictions about a rate cut from Bank Negara Malaysia within 2016. China is still the world’s largest consumer of gold. World uncertainty may see the potential for gold to be above US$1,400-US$1,500. Thus the advice may be for current gold holders to take profits due to the current sudden spike. Based on history, the gold price is still 40 percent below the previous cycle highs from 2002 to 2011 when gold prices surged 582%.
I have ZERO intention to buy more gold. I am still waiting for the possibility of a short local trip, perhaps to Melaka if gold price keep its uptrend. As for those who believe gold may be a good diversification, please do google for ‘Gold Price Trends.’ and read both sides before deciding whether to buy, buy more or skip gold altogether. Happy following the golden trend for gold currently.
written on 11 July 2016
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According to experts, diversify no more than 5% into gold of your portfolio.
Even Warren Buffet said that gold only sit there, shinning pretty but does not produce income or dividends. If someone from Mars looks down on us, why are we, silly earthlings, digging out gold from dirt, processed and design it to sell and then bury them somewhere again. Unless it is for jewelry, it is not investment but costume ornaments.
In gold jewelry, one have to pay not only for gold quantity but it’s design, workmanship and gold lost in manufacturing.
Even experts are against paper gold(gold saving account from banks, ETF, and gold shares and any but not physical gold). Yes, physical gold incurs storage space, security etc. One of the reasons, gold price is distorted or controlled, is due to actual accounting of physical gold with paper gold. Who is the actual authority doing the auditing that the gold amount in your bank account paper/book is backed up with its physical gold quantity in their vaults? Trust? Ditto for ETF, SPDR GOLD, gold shares etc. how do we know in the world, the amount of paper gold is backed up with the actual quantity?
The surest way is to keep physical gold. Even that, there are much fake gold being manufactured in China, in so high tech manner that no laymen can tell the difference, and it is sold cheaply in eBay, on-lines and shops in many countries. Only sophisticated machines can tell its real quality. One can weigh it, scratch scrap, hear it’s clink sound but to no avail! So buy gold from only very reputable companies with long history.
I like your comments Frederick. No more than 5%. haha.. Yes, for me, it’s still under the negligible level currently. Gold jewellery design, agree. That’s why sometimes the old jewellery is sold or exchanged for newer designs. Monitoring paper gold vs physically gold, I think this is true for the whole world. My friend said he prefers to buy gold coins instead and he actually brings it around… Fake gold is something really new to me. Wow… Sometimes, these ‘new’ technologies are really very advanced… Thank you very much for sharing. I learnt today.