I opened a Gold Investment Account (GIA) with Public Bank on Monday 6 Oct 2008. 20 grams of gold at the price of 95.20 Ringgit per gram. Today it’s 100.79 Ringgit/gram. Maybe I should deposit another 10-20 grams seeing that it’s on a bullish trend. Clickety click for PBB’s gold price.
Of course, there are other ways of trading gold, such trading futures in COMEX, trading in spot gold in London, buying physical gold or buying gold coins (e.g. Canadian Gold Maple Leaf, Krugerrand, US Gold Eagle Coin, Chinese Panda, etc…)
What prompted me to invest in gold is that I read around the net and those-in-the-know advised to put money in gold during this time of crisis.
I read around and the reason is that people will flock to gold when there is inflation, stock market crisis, bank failures and political instability (war).
[From this point onwards, it’s purely me typing out based on my limited understanding of economics and trading. So, caveat emptor — let the
buyer investor/reader beware.]
1) US had just printed tonnes of money to finance the bailout. Printing more money will cause inflation. 2) Next the stock market is in terrible state. Especially bad at this time of writing. So people flock to safer investment vehicles. 3) And there are lots of bank failures in the US and everywhere else right now. In fact, Iceland just went bankrupt. But then I’m investing indirectly through a bank, janganlah PBB goes belly up.
Another thing I found out was that central banks sometimes manipulate the gold futures price, to limit the price. The reason is not to make gold shine too much compared to the cacated stock market (pun intended). If gold performs too well, then no one will want to invest in the stock market. Consequently, the doomed financial houses will not be able to get new capital from the stock market.
However, the price of physical gold is still pretty high, as evident from the price of gold coins that had not dropped much. Suggesting that the demand for gold is still pretty strong, and further implicating that gold price is being manipulated.
“So?!” you asked.
So, this is an opportunity to buy when gold price is manipulated down. Central banks don’t really care much for gold price. They are just trying to save their banking system. So once habis manipulating, they cabut lah… and gold will continue to move as usual… which I hope is up. Well, at least ‘up’ is what many people are saying lah.
A few references (do take note of the date the articles are posted):
- 8 thing everyone should know about gold — James Turk in goldprice.org
- Crude oil vs gold — www.bhcinvestment.com
- Quick update by BHC Investment about gold
- Gold price manipulation by central banks — www.bhcinvestment.com
- Gold rush 21 – Video about gold price manipulation — www.bhcinvestment.com
- Keep Your Eyes on the Horizon, the Long Term — goldprice.org
- This period of suppressed prices is a gift, an opportunity, to load up — goldprice.org