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Invest Wisely in Gold My Smart Money Tips

24 June, 2013



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Investing in gold at the moment seems to be a very attractive option especially after Malaysia’s annual inflation rate soared to record high of 8.5% in July 2008. This rate is far higher than the 7.8% prediction by the analysts. With our fixed deposit rates of approximately 3%, this means the value of our money in fixed deposits are effectively halved, simply because of the inflation rate!

Will Malaysia’s Bank Negara succumb to the pressure and raise their overnight rate policy? Although it remains to be seen, it is best to brace yourself and invest wisely in strong assets that will not be eroded by inflation such as commodities, property or gold.

However, as with all investments, do be careful and do your research prior to investing. Find out why below the jump.

I researched two local banks which offer the gold investment account and was surprised to see that the gold selling and buying rates offered by each bank differed by quite a substantial margin.

As at 25 August, these are the rates for Public Bank’s Gold Investment Account:

DATE

SELLING (RM/g)

BUYING (RM/g)

25 – Aug – 2008

90.91

87.91

And here are the rates for Maybank’s Gold Savings Passbook:

DATE

SELLING (RM/g)

BUYING (RM/g)

25 – Aug – 2008

93.30

86.30

I was really surprised to see how the rates for the two banks differ.

Public Bank is selling at a RM2.39/gm cheaper. It may not seem like much but will definitely be substantial if an investor is to purchase 10gms or more.

In addition, Public Bank’s spread between their buying and selling rates are RM3 compared to Maybank’s which is more than double at RM7! This means that Maybank is earning more from their spread margins and an investor who purchase the gold investment from Maybank may be subjected to higher gold price fluctuations from their wider spread.

Do research and consider all options before you invest into your preferred investment account. Be a smart investor!

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