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4 Different Ways To Invest In Gold In Malaysia

Gold is deemed as a safe haven when stock markets and currencies don’t do well.

 

The existence of gold came before paper money was introduced. It dates back to 500 BC when pharaohs were buried with prized possesions made of gold. Even till today gold is still considered as an item of high value.  

In addition, gold is deemed as a safe haven with past records having shown that its price rose during economic uncertainties or when currencies were not doing well – having served as a backup during tough times. Recently with the weakened ringgit and high inflation, more investors may want to invest in gold.  

According to jewelry company Habib Jewels, interest in gold bars surged by 30% in 2022 showing that consumers are not just shopping for gold as a wearable accessory but also to be kept as an asset. 

#1 Increased Interest In Gold Bar 

You can invest in gold by purchasing physical gold bars, bullion coins or jewelry. There are a few places where one can buy physical gold bar and bullion including banks and gold shops. You can purchase the Kijang Emas Gold Bullion Coins that are minted by the Royal Mint of Malaysia from Maybank and Bumiputra Commerce Bank.  

They come in sizes of 1 troy ounce (31.105g), ½ troy ounce (15.550g) and ¼ troy ounce (7.780g) and prices are pegged to the international gold price. You can keep your gold bars and bullion in safe deposit boxes in banks for a fee.  

Otherwise, one of the largest jewelry retail chains in Malaysia, Poh Kong offers its own Bunga Raya Gold Bars that come in 1g, 2g, 5g, 10g, 20g, 50g and 100g, priced from RM730 to RM32,500. 

Gold bars and bullions tend to have 99.99% gold purity which means that they consist of 99.99% gold and only 0.01% impurities or other metals. When you purchase gold jewelry, you need to be sure that it is of 99.99% purity and not mixed with other materials – that are not as valuable as gold. The value of gold jewelry can also be affected by wear-and-tear over time.   

#2 Trade Gold At Daily Rates   

There are less literal ways of trading gold – which means investors can still tap into the value of the commodity without having to buy physical gold and worry about its safekeeping. Many banks in Malaysia let customers buy and sell gold at daily rates to make a profit through a gold investment account.  

Let’s say an investor purchased 1 g of gold at the selling price of RM280 per gram and later sold the gold at the buying price of RM290 per gram. He or she would have made a profit of RM10.  

Selling price per gram – Buying price per gram = Profit/Loss 

RM290 – RM280 = RM10 

Compared to investing with physical gold, the gold investment account is more accessible as investors can start with as little as 1 gram of gold whereas gold bars, bullions and jewelry tend to be heavier and thus come with a heftier price tag.  

In addition, it is more convenient to trade with a gold investment account where investors can access their accounts online and choose to buy or sell gold in varying grams easily. With physical gold bar, bullion and jewelry, one must also consider liquidation challenges as there may not always be ready buyers.  

 #3 Gold ETFs Help Diversify Your Investments 

Exchange-traded funds (ETFs) consist of several securities and track a country index, industries and asset classes to mimic its performance. ETFs are listed on the stock exchange and hence can be traded like stocks. The gold ETF Malaysians can invest in is the TradePlus Shariah Gold Tracker on Bursa Malaysia.   

Gold ETFs have people invest in gold-related assets instead of the commodity itself. This is unlike the previous investment methods whereby your returns depend on the value of gold solely.  

Investors may be interested in investing in gold ETFs to diversify their investments. Gold prices were shown to buck trends, rising when the stock market is not doing well. Through gold ETFs, investors can have their portfolio gain exposure to gold commodity at an affordable price as well. 

#4 Invest In Gold Mining Companies 

One way to invest in gold is to buy the shares of companies that mine them. Depending on the performance of these companies, investors make a profit or loss. Some bigger companies even provide dividends to investors for holding their shares. 

One of the gold mining companies in Malaysia is the Poh Kong Holdings Berhad and its share price is RM0.86 at the time of writing. When investing in a gold mining company instead of the commodity itself, investors need to consider the company’s performance and market risks. 

In the past, investors have witnessed gold prices increase when the stock market is not doing well. Some investors would buy gold in economic downturns. There are risks with investing in gold in that the price of gold has been shown to be quite volatile, relying on the supply and demand for it.  

Should You Invest In Gold? 

After thousands of years, gold still holds its value. People around the world invest in gold to hedge against market and inflation risks. In the past, gold prices bucked the trend, rising when financial markets and currencies didn’t do well.  

Gold trading is also not a dividend-generating investment, unlike buying stocks. Investors get only capital gain from buying and selling gold. However, investing in gold is deemed to provide diversification to one’s portfolio, balancing out their investments during an economic downturn. 

 

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