Baidura Ahmad
When it comes to deciding where to put your money – cash and the stock
market fluctuate, while property requires a big capital and bonds and
trust funds can be too slow to realise their full potential for the
impatient investor. Enter gold bullion as the perfect investment for
those who want security, with the flexibility of being able to offload
their investment at an internationally pegged price within 24 hours.
A timeless and timely investment, gold has for thousands of years been
prized for its rarity, its beauty, and above all, for its unique characteristics
as a store of value. Nations may rise and fall, currencies come and
go, but gold endures. One of the earliest records of using gold as money
dates from 560BC when King Croesus of Lydia (today's western Turkey),
created a coin emblazoned with his own image. This ostensibly simple
act changed the world of commerce. Gold became currency, a medium of
exchange with a definite value, replacing barter and other commodities
as money.
"In today's uncertain economic and political climate, many investors
turn to gold because it is a ‘currency without borders' – an important
and secure asset that can be tapped at any time, under virtually any
circumstances," says the World Gold Council.
Founded in 1987, the Council was formed and is funded by the world's
leading gold mining companies to stimulate and maximise the demand for
gold as an investment by consumers, investors, industry and the government
sector.
The price of gold has been on the uptrend, from US$31,000 (RM117,800)
per 1kg bar a year ago to US$38,232 as of last week.
After the Asian financial crisis of the late 1990s, and more recently
September 11, the sale of gold worldwide has gone up by 114 per cent
with about 40 to 60 tonnes of gold sold during that period.
In Japan, demand for gold has been boosted by the government's decision
to end its guarantee of bank deposits.Japanese private investors now
hold an average of US$5,000 in gold, twice as much as before.
The trend seems to be replicated, albeit on a smaller scale, locally
as more Malaysians buy gold as an investment, says Joan Lye, manager
of the World Gold Council Malaysia.
More specifically, the sale of Malaysia's first and only gold bullion
coin, Kijang Emas, has gone up. The 24C pure gold coin, introduced last
year, is sold at two local banks, Maybank and Bumiputra-Commerce Bank,
in three denominations – 1oz, ½oz and ¼oz.
Minted in 999.9 to a thousand parts of pure gold, the Kijang Emas is
priced at the daily gold market rate. Coins can be resold at the two
banks' branches nationwide.
"Asians have always had an affinity for gold. But today, apart from
buying gold as jewellery, more Asians and Malaysians are buying gold
as an investment.
"For instance, during the festive season last year, we saw more ordinary
people, such as housewives, buying the 1oz Kijang Emas for keeps, rather
than the ¼oz as they would have previously.
"Normally, only serious collectors of gold bullion buy the 1oz denomination,"
adds Lye.
Since its introduction in July last year, the value of the 1oz coin
has appreciated by 20.7 per cent to RM1,040; the ½oz to RM520 (23 per
cent); and the ¼oz to RM260 (25 per cent), as of last week.
As part of its ongoing promotion, the World Gold Council Malaysia has
put on display four designs of wang hantaran, the traditional gift from
a Malay bridegroom to his bride, using the Kijang Emas instead of cash.
The four hantaran designs are on display at the Bank Negara Malaysia
booth at the KL International Money Fair 2002 at the Putra World Trade
Centre, Kuala Lumpur, which ends today.
For those who want to invest in gold, but do not want to be seen leaving
the bank with bars of the yellow metal, you can open a gold bank account
at Maybank, so far the only bank to offer such a facility in Malaysia.
The gold deposit is treated the same as a normal bank account. This
method of holding gold, known as unallocated gold, means that an investor
does not have to stuff his pockets with gold before emerging from the
bank.
Neither does the process of selling or buying gold involve physically
visiting the bank. Most deals are made by telephone, during which the
price is confirmed and the type of gold is specified by the buyer.
So, the next time you want to outshine the others over a wedding or
birthday present for your best friend or a gift for a newborn grandchild,
you might want to consider a Kijang Emas coin or a gold bank account,
which will most likely appreciate in value over time. It beats gift-wrapping
an expensive crystal vase.
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THE GOLD DINAR RESEARCH GROUP 