Recently, I was interviewed by a journalist from The Business Times on gold investing.Have you invested in gold?
Dear readers,
I’m writing this blog post in MacDonalds at Takashimaya munching, on McNuggets and slurping my Coca Cola Light.
Yup, it’s my leave today and I spent the day clearing some of my backlogs.
What I wish to share with you, is my first gold investment that I made today. To invest in gold, there are a few methods:
- Start a Gold Savings Account with UOB
- Invest in streetTRACKS® Gold Shares ETF
- Invest in gold mining companies overseas
- Purchase physical gold bars/coins
For me, I chose to purchase physical gold coins for a start. The time horizon set for my gold investment is at least 5-10 years. So today, I bought my first Canadian Maple Leaf gold bullion coin. My original intention was to get the American Eagle gold bullion coin but UOB didn’t have any stock for that. Hence I settled for a Canadian Maple Leaf. All I can say is, the feeling of a gold coin on the palm of your hand is damn good!
Here’s an image of what the Canadian Maple Leaf gold bullion coin looks like.
Now you’re probably going to ask me, why did I choose to buy physical gold coins instead of the other three methods of gold investments that I mentioned earlier. Well, to me, buying a gold coin (at a premium due to manufacturing and taxes) is the most transparent because no matter how long you keep your coin, you will not incur any additional charges (until your collection becomes huge and you need to keep them in a safe deposit box).
I foresee that gold will be a popular asset once everyone in the world realise that paper money is indeed worthless, and gold is still the absolute value. Till then, I’ll continue to have 10-20% of my investments in gold.
So have you started your gold investment yet?
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No Responses to “Have you invested in gold?”
Hi Chris,
Get to your blog through the Gold investing thread @ HWZ. I’m a novice in this area but is interested in buying Gold bullion coins. Just wanna seek advice from you on how come the premium tends to be higher for smaller denominations of coins.
Eg. 1/20 Oz coin bank sell 80.25 and buy @ 49 while 1 Oz coin bank sell 1123.50 and buy 1002.00. Shouldn’t 1 Oz command more premium since it has more Gold content in it?
Hi Jason,
This is my perspective of why a smaller gold coin commands a higher premium than a larger gold coin.
From my understanding, the premium for gold coins consists of a few factors. One of which is manufacturing costs.
Assuming that we use a single machine to process raw gold into gold coins (I’m sure there are more complicated processes behind the scenes). The same machine can generate a variety of gold coins, from 1 Oz to 1/20 Oz coins with the same amount of effort.
As the same amount of effort (cost) is used to create every single coin, costs is divided by the number of coins (and not by weight).
Because a 1/20 Oz coin will cost the same amount of cost to produce as a 1 Oz coin, the total cost to purchase a 1/20 Oz coin would appear higher than a 1 Oz coin.
I hope this answers your question.
Good advise on Gold.
Personally, I preferred Silver over Gold (ie. I also like Gold), which will play catch-up in the next uprun.
Target for Gold at US$1000 and Silver at US$25 per ounce within the next 12 months.
Hi Phua,
I also have investments on silver as well. The thing is, if you look at the trends in the gold charts, they are more bullish and on an uptrend, be it 30 days or 365 days. Hence I would see it as a safer bet.
For silver, it’s more volatile with one of the reasons being that its a lot cheaper than gold.
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