Top Three Reasons Why You Must Invest In Gold Now
We all know that gold has always been considered the best investment opportunity and a universal finite currency that held by every central bank of note in the world.
For many people, it has become a hobby that they will cherish for a life time. I am sure your grand mother do keep some gold.
Gold can being used as a hedge against any type of economical, financial or currency crises. All smart investor must have some Gold in their investment portfolio.
Normally the price of gold will increase dramatically after a stock market crash.
The weakening of US dollar have also drive gold’s price to go higher.
The price of gold is directly in relationship with weaker dollar and economic uncertainty. I notice the gold price has little relationship with other currencies.
Therefore many smart investors buy gold as a hedge against inflation, fluctuations and depreciation of paper money and to protect against other macroeconomic and geopolitical risks.
Does that mean it’s too late to join the gold rush?
No.
This is because as long there is uncertainty(including investment market declines, burgeoning national debt, currency failure, inflation, war and social unrest) then Gold will be always in Demand irregardless what those clever economies say!
Top Three Reasons Why You Must Invest In Gold Now!
1) No One Control The Price vs Currencies
Gold is one of the currencies that not created and controlled by any governments.
Almost all today major world currency such as dollars, euros, yen, pounds, renminbis, rupees, etc, are called ‘fiat’ currencies.
This mean every paper currency do not represent anything tangible but are only worth something due to government decree by legal tender laws.
Therefore in theory, the Government could print unlimited numbers of money with any tangible asset backing at it will. This will make the currency worthless
2) Gold Is The Best Hedge Against Inflation
We need to protect our existing investment portfolio and gold is a hedging tool. What hedging means is to protect against price fluctuation.
3) It Force you To Save
Since the gold is illiquid compare to stocks, it can force you to save money
Today instead of buying mining stocks or bars of bullion, smart investors have plenty of option to their money into funds that own the metal.
As long the dollar is weaken then gold is a better buy in these days. take note that gold did very well in The Great Depression.
The demand for gold is huge right now and suppliers can’t seem to keep it up.
Gold hits record highs as investors move in
NEW YORK: For lack of a better option, investors are flooding into gold.
Gold prices hit a record high Wednesday, settling at $1,292.10 after a rally that started late Tuesday.
The run-up came after the Federal Reserve indicated it will leave interest rates historically low, and might be open to printing more money to stimulate a weak economy. The news sent the dollar lower, and big investment funds snapped up gold as a safe haven.
“People are questioning where to turn,” said Dan Cook, an analyst with IG Markets in Chicago. “As long as there are a lot of concerns on the global economy … gold can keep going higher.”
Gold has been climbing steadily since the financial crisis of 2008, a sign that investors aren’t sure where to park their money. While the stock market has been rising in recent weeks, equities are still a volatile investment. And the stalled economic recovery has added to the uncertainty, as central banks and governments consider more stimulus measures that could boost inflation.
Gold cost $718.20 in October 2008, just after the financial crisis, 80 percent below Wednesday’s closing price.
The immediate factor behind gold’s rise was the Federal Reserve’s announcement Tuesday that the bank might again jump in to help the struggling U.S. economy, said William Rhind, strategic director of ETF securities.
The Fed’s actions, coupled with more stimulus from other countries, raises the specter of inflation, Rhind said. That makes gold a natural shelter for investors who see a long stretch of weak growth and a sagging dollar.
That means current gold prices could stay around the level of $1,300 for some time to come, Rhind said.
“It’s not something that can be changed in the short term. The reason is that with looser monetary policy, and with deteriorating (government) balance sheets, that will lead to inflation pressure,” he said.
At the same time, investors are still suspicious of stock markets after a “flash crash” in May wiped out stock values in a matter of minutes, said Cook, the IG Markets analyst. Prices recovered that day, but the causes of the crash are still under investigation.
Other precious metals also rose. Silver December contracts gained 41.5 cents to settle at $21.055 an ounce and copper gained 8.4 cents to settle at $3.5650 a pound.
September platinum gained $20.50 to settle at $1,632.90 a pound while September palladium gained $11.85 to settle at $539.65.
Oil prices slid after the government said stockpiles of oil and gasoline grew last week, even though a major pipeline serving Midwest refineries was shut because of a leak.
Benchmark crude for November delivery lost 26 cents to settle at $74.71 a barrel on the New York Mercantile Exchange.
In other Nymex trading in October contracts, heating oil fell 1.29 cents to settle at $2.1070 a gallon and gasoline lost 1.82 cents to settle at $1.9014 a gallon. Natural gas rose 4.7 cents to settle at $3.966 per 1,000 cubic feet.
In London, Brent crude fell 47 cents to settle at $77.95 a barrel on the ICE Futures exchange.
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Gold prices reach new record high
NEW YORK: Customers who step into the offices of Heritage West Financial in San Diego have always favored gold as an investment on paper, a place to park their money. But in the past few years, Ralph Weston began to notice a change in his clients’ orders.
They wanted to take the 33-ounce blocks home with them.
“I don’t know what they do with it,” said Weston, a market analyst. “Do they use it as a doorstop or what?”
The price of gold keeps going up, setting records week after week. On Thursday it touched yet another new high, trading at $1,296.30 an ounce. Just two years ago, it was trading at about $900.
Low interest rates, a falling dollar and anxiety over holding government debt have prompted investors and central banks alike to buy the metal — something tangible instead of a promise.
To Weston, the gold rush reflects his clients’ diminishing trust in Wall Street and the federal government. Gold has fans in the tea party movement and among viewers of popular conservative cable-talk host Glenn Beck, who touts it on his show.
In financial circles, analysts credit the rising price of gold to an unlikely duo: investors seeking shelter and central bankers from India, Bangladesh and other developing countries. Both are wary of a falling dollar.
It starts with low interest rates. Central banks usually hold currencies from the world’s largest economies — dollars, pounds and yen — and then invest them in short-term bonds.
At the moment, interest rates in the United States and other developed countries are near record lows. Currencies tend to follow the path of interest rates, so not only do central banks get little return from buying dollars, but they face the prospect of the dollar falling even further. What’s the alternative?
“Historically, gold has been the last thing you sell,” said Francisco Blanch, commodity strategist at Bank of America. And in times of crisis, it tends to rise.
The Federal Reserve played a role in gold’s recent surge when its interest-rate committee hinted at further efforts to lower borrowing rates, said Suki Cooper, a commodity analyst at Barclays in London.
The dollar dropped after the Fed’s announcement, reflecting worries that further moves would raise the risk of inflation. Earlier in the month, gold also got a boost from Bangladesh’s purchase of 10 metric tons from the International Monetary Fund.
It’s the same mix that has pushed gold’s price higher over recent months, analysts said. When currencies or other assets fall, gold tends to go its own way, making it especially appealing to central banks.
Consider:
— Sales of the U.S. Mint’s American Eagle Gold Bullion have soared. In 2005, the mint counted 449,000 ounces sold. The tally so far this year: 922,500 ounces.
— The stash of gold held by exchange-traded funds, which allow investors to buy groups of stocks and trade them like a single investment, is piling up. The 22 funds tracked by Barclays Capital hold a record 2,107 tons. That’s almost a year’s worth of gold mining. Annual production runs around 2,400 tons worldwide.
— China has 2 percent of its reserves in gold, or 1,000 tons, according to Barclays research. To reach 10 percent, a mark some consider ideal, China would need to buy all the gold mined in the world for two years.
To understand gold’s price surge, think of it as shifting between two roles, commodity and currency, said Barclays’ Cooper. When the majority of buyers use gold for jewelry and for filling teeth, it trades like a commodity and is relatively stable. In the 1990s, for instance, it traded between $300 and $400 an ounce. Gold is still well off its inflation-adjusted high. It hit $850 in ounce in 1980, which works out to about $2,250 in today’s dollars.
“Now you need to look at gold as wearing its currency hat,” she said. “It’s a barometer of investors’ concerns over the macroeconomic outlook.”
The move by central banks to diversify their reserves has a massive impact on prices, according to Bank of America’s commodity research team. In a recent report, the researchers called the purchases by Bangladesh, Sri Lanka and other developing countries “the new gold rush.”
Bank of America expects to see gold reach $1,500 in the next year. Most scenarios seem to work in gold’s favor, Blanch said. If the economic recovery takes hold and oil prices rise, or even if people expect more inflation, gold goes up, he said. A sharp jump in interest rates could pull many investors and central banks out of gold, he said. – AP
Gold hits new records, nears $1,300 an ounce
NEW YORK: Gold prices traded in record territory again Thursday as inflation-wary investors bid prices up near the psychologically important threshold of $1,300 an ounce.
Gold prices gained $4.20 to settle a record $1,296.30 an ounce, building on gains it made after the Federal Reserve announced Tuesday it might take further steps to stimulate the economy. Investors buy gold when they want to protect themselves against inflation, and it appears the Fed’s statement stoked fears the dollar’s value will continue to fall.
If gold passes $1,300 an ounce, it will likely stay above that level for some time, said CPM Group analyst Carlos Sanchez.
“It’s seen technically as a resistance level,” Sanchez said. If gold breaks through that barrier, investors will feel confident enough to bid it even higher. “The next rally could be between $1,320, or $1,330,” Sanchez said.
Gold prices have nearly doubled since 2008, when an economic panic shook global credit markets and central banks responded by flooding currency markets. Since then, global economic uncertainty and inflation fears have spurred investors to shift money from stocks and cash into gold.
Other precious metals also rose. Silver December contracts gained 15.8 cents to settle at $21.213 an ounce and copper gained 2.55 cents to settle at $3.5905 a pound.
September platinum gained $17.30 to settle at $1,650.20 a pound while September palladium gained $15.20 to settle at $554.85.
In other trading, grain prices continued to sag after last week’s run-up.
Corn fell 5.75 cents to $4.9925 a bushel. December wheat contracts fell 22.5 cents to settle at $6.9725 a bushel. November soybeans added 5 cents to settle at $10.935 a bushel.
Coffee gained 1.55 cents to settle at $1.8310 a pound.
Oil prices rose after two reports provided some hope for the economic recovery strengthening. The Conference Board said its index of leading economic indicators increased more than expected in August and the National Association of Realtors said sales of previously occupied homes rose 7.6 percent last month after plummeting in July.
Benchmark oil for November delivery rose 47 cents to $75.18 a barrel on the Nymex. In other trading, heating oil rose 0.75 cent to settle at $2.1145 a gallon and gasoline added 1.60 cents to settle at $1.9174 a gallon.
Natural gas prices edged higher as traders kept an eye on a potential tropical storm that could disrupt Gulf of Mexico production. Natural gas gained 5.3 cents to settle at $4.019 per 1,000 cubic feet on the New York Mercantile Exchange.
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Gold prices set another record high on investor worries, oil prices fall
NEW YORK: Gold prices settled at a record high Tuesday as investors looked for a safety net after sorting through a batch of mixed economic news.
Gold also got a helping hand from a weaker dollar as it rose US$9.70 to settle at $1,308.30 an ounce. Earlier in the day, it reached $1,311.80 an ounce.
It’s the latest in a series of recent record-setting days for gold as investors seek alternatives to the jittery stock market as prospects for the economy remain uncertain. Many analysts expect the price to continue to climb.
Economic news was mixed on the day. The Conference Board said its monthly Consumer Confidence Index was 48.5, the lowest point since February. Consumer spending makes up a huge portion of the U.S. economy.
Separately, the Standard & Poor’s/Case-Shiller 20-city home price index showed home prices rose in July for the fourth straight month, even as many cities are bracing for declines in the year ahead.
On the positive side, there was more dealmaking news. Drug developer Endo Pharmaceuticals Holdings said it would buy Qualitest Pharmaceuticals for $1.2 billion.
Gold and most commodities also benefited as the dollar grew weaker against other currencies. A weaker dollar makes commodities, which are priced in dollars, more attractive for foreign buyers.
“Consumer confidence is definitely another chink in the dollar’s armor but I think (the gold price jump) it’s a combination of things led by the currencies,” Lind-Waldock senior market strategist Rich Ilczyszyn said.
In other metals contracts for December, silver rose 23.6 cents to settle at $21.707 an ounce and copper gained 4 cents to settle at $3.6370 a pound. September palladium added $9.60 to settle at $560.30 and October platinum gained $5.60 to $1,635.70 a pound.
Wheat, soybeans and corn all fell as traders opted to take some profit and sell contracts ahead of a key government report on crops that is due later this week, said Northstar Commodity analyst Jason Ward.
Wheat prices also were pressured by a chance of rain in Russia, which could make it easier for farmers to plant wheat in a region where a drought ravaged the crop earlier this year, he said.
Wheat for December delivery fell 21.75 cents to settle at $6.8475 a bushel; December corn lost 12.75 cents to $5 a bushel and November soybeans gave up 18.5 cents to $11.10 a bushel.
In other trading, energy prices were mixed as traders sorted through the economic reports.
Benchmark oil for November delivery fell 34 cents to settle at $76.18 a barrel on the New York Mercantile Exchange.
In other Nymex trading in October contracts, heating oil rose 0.17 cent to settle at $2.1245 a gallon and gasoline lost 0.09 cent to $1.9479 a gallon.
Natural gas gained 3.7 cents to settle at $3.837 per 1,000 cubic feet on a day when the contract expired.
fr:biz.thestar.com.my/news/story.asp?file=/2010/9/29/business/20100929081232&sec=business
Gold price rises to yet another high, other commodities too rise
By IZWAN IDRIS
PETALING JAYA: Gold rose to a new all-time high yesterday, while other major raw materials – from copper to cotton – continued to head north as some investors see commodities as safer bets against inflation.
Spot gold price hit US$1,328 an ounce following a surprise pledge by the Bank of Japan yesterday to keep interest rate at virtually zero and to step up purchases of assets.
This had sparked fresh worries that central banks in developed countries may have to further their so-called quantitative easing policy to bolster their ailing economies.
This massive liquidity let loose to spur economic growth had in turn pushed prices, from equities to commodities, higher.
The price of gold, traditionally viewed as a hedge against inflation, had gone up 21% so far this year. Gold prices had been rising every year from its low of US$272 an ounce at the end of 2000.
Gold’s record-breaking performance this year was outshined by poor cousin silver’s 31.5% jump over the same period.
In fact, prices of commodities from cotton to coffee had gone up this year, boosted by demand from sophisticated investors.
The price of cotton had gone up 35% since January, while coffee had gained 25%.
A recent research by JP Morgan, reported by Telegraph, revealed that commodities were a hedge against rising inflation and improved returns while reducing volatility.
It said commodities outperformed equities and bonds when economies were in a late expansion phase by 10% and marginally outperformed when economies were in the early expansion phase just after a recession.
The only time they lagged other assets was towards the end of a recession.
Meanwhile, Goldman Sachs Group Inc yesterday raised its copper forecasts and projected the metal will trade at US$11,000 a tonne in 12 months. That compares with an estimate of US$8,050 in a report on Sept 17.
Copper price in London yesterday was 0.5% higher in London at US$8,105 a tonne.
Crude oil, too, may head higher in the coming months, and was steady at above a two-month high of US$82 per barrel ahead of inventory data in the United States.
At home, crude palm oil (CPO) futures on Bursa Derivatives gained RM39 to RM2,705 a tonne. The contract hit RM2,737 last week – the highest since May last year.
OSK Research’s analyst Alvin Tai, who had initially expected CPO prices to weaken towards the end of the year based on production forecast, said yesterday that there could be some element of “speculative” trade that helped kept palm oil prices bouyant.
“We now expect CPO prices to remain firm for the rest of the year,” he said.
CPO futures had gone up 14% in the past three months, but was little change compared with where it was at the start of the year.
fr:biz.thestar.com.my/news/story.asp?file=/2010/10/6/business/7167949&sec=business
Gold, other metal prices fall as on Chinese rate hikes
NEW YORK: Gold and other metal prices fell Tuesday as China’s government announced it will boost interest rates, roiling currency markets and suggesting China might curtail its appetite for raw materials.
Gold for December delivery fell $36.10 to settle at $1,336 an ounce. Silver for December delivery fell 63.3 cents to settle at $23.780 an ounce, while copper fell 9.75 cents to $3.7575 a pound.
China’s interest rate hike is intended to control inflation and rapid growth even as other Asian economies move to keep their recoveries on track.
The rate on a one-year loan was raised by 0.25 percentage points to 5.56 percent effective Wednesday, the Chinese central bank said. The one-year rate paid on deposits was raised, also by 0.25 percentage points, to 2.5 percent.
The move made traders sell out of positions in gold, silver and other metals as they anticipated a drop in Chinese demand, said Carlos Sanchez, analyst with CPM Group in New York.
“That was a major factor weighing on asset classes across the board,” Sanchez said. “It would suggest there will be reduced demand for raw materials from China.”
In other metals contracts, palladium for December delivery dropped $9.65 to $578.45 an ounce. January platinum fell $19.40 to settle at $1,673.60 a pound.
Grain prices also fell.
Corn for December delivery fell 11.25 cents to settle at $5.46 a bushel. Prices for other agricultural futures followed corn lower. Wheat for December delivery fell 18.5 cents to settle at $6.715 a bushel. Soybeans for January delivery fell 3.5 cents to settle at $11.915 a bushel.
Most energy prices fell, led by crude oil.
December crude trading on the New York Mercantile Exchange fell $3.64 to $80.16 a barrel. In November contracts, heating oil fell 8.68 cents to settle at $2.1893 a gallon, while gasoline fell 10.32 cents to $2.0483 a gallon.
Natural gas for November rose 8.2 cents to $3.513 per 1,000 cubic feet.
fr:biz.thestar.com.my/news/story.asp?file=/2010/10/20/business/20101020075404&sec=business
More attracted to gold savings account
By ELAINE ANG
Uptrend in gold price and low interest rate regime add to lustre
PETALING JAYA: Banks’ gold savings accounts are expected to continue to gain popularity in anticipation of an uptrend in gold price and investors’ desire to diversify their investment portfolio in the current uncertain global economic conditions, industry experts said.
Malayan Banking Bhd (Maybank) deputy president and head of community financial services Lim Hong Tat said the number of Maybank Gold Savings Accounts had been growing an average of 8% every month so far in the current financial year ending June 30, 2011 (FY11).
In FY10, the number of gold savings account and investment value recorded an average monthly growth of about 11%. The total number of accounts as at Sept 10 is about 27,000.
“We are optimistic that demand will continue to be on an uptrend and we hope to register a 50% growth in this portfolio in the coming year owing to the infancy of the local market.
“Demand has also grown primarily due to the weakness of the US dollar and the perception of increasing uncertainty in the financial markets,” Lim said.
In addition, Lim said the bank’s active promotion campaign at branches on gold savings as an alternative investment option had a positive effect in creating awareness of investments in gold. He said the gold savings account was an alternative savings as well as investment option for those who wished to diversify their investments.
“Given the current high price of gold as well as greater awareness of the gold savings account, we are positive that it will continue to remain an alternative investment product,” he said.
A Public Bank Bhd spokesman said the bank’s Gold Investment Account had gained popularity since its launch in April 2008 as evidenced by the 54% and 68% growth in the total number of accounts and gold amount outstanding respectively for the past one year.
“We expect the gold investment account to continue to perform well next year in anticipation of higher gold price coupled with our latest initiative which enables our customers to perform gold purchases and sales online via our web portal,” he said.
New entrants to the gold savings account market Kuwait Finance House (M) Bhd (KFH) and United Overseas Bank (M) Bhd (UOB) also see good prospects for the product.
KFH chief executive officer Jamelah Jamaluddin said the KFH Gold Account-i which was launched nationwide on April 29 had been very well accepted.
“Demand has been more than expected, surpassing our business projection of 50kg for the year.
“Going by the current rate, we are confident of booking more than double our initial projection by year-end,” she said.
Jamelah expects the demand for gold to hold at current levels, given the public’s heightened awareness on its availability and affordability.
“Demand for gold has risen significantly as an array of buyers ranging from investors, speculators, hedge funds, central banks and the public, continue to buy gold,” she said.
Moreover, the continued low interest rate regime globally had also built expectations of eventual inflation pressures, and gold has always been viewed as the hedge against inflation, she added.
Jamelah foresees gold price remaining firm for the rest of the year despite minor adjustments along the way.
“Analysts have expressed expectations that the price of gold will rally between US$1,600 to US$2,000 next year, and we share the same view,” she said.
UOB recently introduced the UOB Gold Investment Accounts, comprising Gold Savings Account and Premier Savings Account on Oct 15.
The Premier Gold Account caters to high net worth individuals while the Gold Savings Account is designed mainly for the mass retail market.
UOB managing director and head of global markets and investment management division Michael Beh said 50 accounts were opened in just one week.
“Demand is expected to continue to be strong next year for investment in gold. Investors are basically still bullish on the metal,” he said.
Gold hit a high of US$1,381.15 per ounce on Oct 14, a 23% appreciation since the beginning of the year when it was traded at US$1,121.20 per ounce.
Gold is currently trading at about US$1,358 per ounce.
Beh said the gold market was well underpinned by fundamentals and expected to continue to perform well.
In general, banks’ gold savings accounts are statement-based accounts where customers will have a gold savings passbook.
When customers purchase gold, the amount is credited into their respective accounts and vice versa.
The gold invested in this scheme is pegged to international gold prices. Customers will make a profit when they sell the gold at a price higher than their initial purchase price.
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Gifts of gold jewellery get smaller and lighter
AS gold prices continue to soar to stratospheric heights, Asian brides are seeing their traditional wedding gifts of gold jewellery becoming lighter and smaller.
Gold outshone most commodities in 2010, setting a new record of US$1,431.25 (RM4,414.69) per ounce on Dec 7 last year.
The precious metal is expected to continue to roar ahead in the new year as both investors and the man on the street buy up gold amidst uncertainties over global economic growth, which continues to be weak.
“I have not even hedged my gold,” Datuk Seri Andrew Kam, chairman and chief executive officer of Peninsular Gold Limited, told Sunday Star in an interview.
Peninsular Gold is one of the country’s largest gold producer.
“Gold prices are being driven by uncertainties in the currencies, especially the US dollar, and the upward movement of oil prices,” said Kam.
He expects demand to remain strong, particularly from China, India and the Middle East.
Gold started on its upward trajectory around 2004 when it traded between US$260 and $300 per ounce.
Soaring gold prices have impacted a wide spectrum of Asian life – from pawnshops to wedding gifts.
Despite its high price, friends and relatives of Asian brides are still keeping up with the tradition of giving away gold jewellery.
According to Poh Kong Jewellers, one of Malaysia’s largest jewellery retail chain stores, people still spend the same amount of money but are buying smaller items.
“People are buying lighter weight items,” said Margaret Hon, Poh Kong’s head of corporate communications.
Poh Kong’s gold wafers, named Bunga Raya, have also seen brisk sales as buyers snap them up as investments.
“We sell them in weight ranging from 1g to 100g,” said Hon.
“Whenever the global currencies are weak, people turn to gold as an investment. They also see gold as quite a safe hedge against inflation,” she said
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