Thursday, April 9, 2009

Where to Invest in Gold

son of the gun, 5 minutes after I published this article, I found that Cardon Ding has just written almost exactly the same article in a FREE ebook, download here to view all great articles of this group writting project !

When an experience investor does not know what the future holds, he invests in gold.

The best way to invest in gold is to buy the purest form of physical gold as possible, namely the bullion bars or coins.  If given the option, bars are better than coins.  In principal the less art work the better.  The more art work on a bullion will usually comes with higher price spread.  Bullion price spread is usually 3% to 7%

The most common Malaysia gold bullion in Malaysia is the Kijang Emas Gold Bullion Coin.  I only know you can get them from Maybank, you can check current gold counter rate here and it can be purchased from selected Maybank branches nationwide

UOB also offer saying that they have widest range of gold bullions and it seems they do provide narrower spread (2.6% onwards) in their price list.  You will need to call or email them for info.

There are also some retail sellers like   Poh Kong and PAMP but they don't guarantee buy back at market rate or they may buy back at 15-20% lower than market price.

Other sellers like myNetGold, Gold2Trade, R2Gold, SecureGold aren't really proper gold investment.  As of right now, I don't see them any better than a private company's shopping vouchers.  If you must deal with one, I myself may start looking at Public Gold, which has nothing to do with Public Bank.  Its just a tiny company in Penang.

However, those un-real gold sellers can be a good medium to 'speculate' gold price.  If that is your main goal then you may also open a gold investment account with Public Bank or Maybank.

Generally if you cann't afford even one ounce of gold bullion (MYR 3,000), then you should forget about gold investment.  But you still can speculate them using virtual accounts as mentioned above.  

The heavier bullion bar you buy, the smaller the price spread it is.  There is a saying that for about MYR 100,000 the spread can be as small as 1%+ which makes it extremely attractive over a shorter term accumulation says 1-3 years of fighting inflation during economy down turn.


Encik Wan said...

Well said. Personally I favor gold coins sold by UOB because they are saleable outside Malaysia.

Michael Tsen said...

because they were bought from outside malaysia first of all :)

Anonymous said...

If i want to invest in gold, what is the best way to do it? Buy gold pieces or set up online banking to trade gold online? Is there a bank to do this with this service? Which one is it? Is it safe?

Michael Tsen said...

if you are buying and selling, use the banks like Maybank, UOB and Public Banks. People around me prefers Public Banks for reasons I don't really get except their counter services are fast and reliable.

if you are buying to keep, get the physical stuff.

No Online Gold Trading yet that I can find, if you do find one, do leave a comment here ... thanks in advance !

Anonymous said...

Could you please share your opinions on these three online banking services please?

What is it that u r talking about buying and selling if these banks do not have online gold trading?

I am trying to find out how to trade gold online with local banks, seems safer to carry $ to shop and carry the bricks home then worrying non stop for the reliability of security system at home....

Michael Tsen said...

I like Public Bank, then MBB and lastly UOB.

PBB : good counter service, always someone to talk to. Usually redirected less than twice to reach someone who can help with my 'tough' questions.

MBB : some branches have few people and can still get things done.

UOB : most staff have no clue what their own services are and always come back with a lousy answer after waited for them to check things out 30 minutes later ...

These are just my personal experiences and I am around Kepong and KL down town area.

Offline gold bank account as in you have a passbook and you have to go to bank physically to save and withdraw.