12 April 2013 : Gold Sinks Below USD1500/ounce!

Spot Gold Price closed at USD1477.60/ounce on Friday, the lowest ever since July 2011! The dawn of a bear Market for Gold?

Gold Price as of 12 April 2013

What cause the slump of Gold price on Friday?

"The Federal Reserve indicated April 10 that several policy makers favor pulling back this year on $85 billion in monthly debt-buying stimulus dubbed quantitative easing. Through 2012, the metal rallied for 12 straight years as central banks expanded their balance sheets."

"An April 9 debt assessment by the European Commission said that Cyprus had committed to selling around 400 million euros ($523 million) of “excess” gold reserves. The Cypriot central bank responded to that disclosure by saying it hadn’t discussed plans for a sale."

""Goldman Sachs Group Inc. said this week that the turn in the gold-price cycle is accelerating after the 12-year rally as the recovery in the U.S. economy gains momentum.

"European Central Bank President Mario Draghi said the profits of any gold sales by the Cypriot central bank must be used to cover losses it may sustain from emergency loans to Cypriot commercial banks. He spoke after a meeting of euro-area finance officials today."

"The possibility of Cyprus selling gold “is a heavy weight on the market, and could set a bad precedent for other central banks looking to relieve pressures from austerity measures,” Dave Lutz, head of exchange-traded fund trading and strategy at Stifel Nicolaus & Co. in Baltimore, said by telephone." 

However most of the news being spread around are rather speculative as there is still no unconfirmed verdict on the pulling back of the quantitative easing by the Feds. Neither has the Cyprus bank decide upon selling their gold reserves.

Gold Future traders are laughing all the way to the bank on Friday, feasting on these unconfirmed news. 

The next few weeks would be an exciting time as we see how the gold market will pan out. The next barrier to break is the USD1450/ounce level. 

Cheers and Happy Investing!

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Cyrpus Clinches Bailout Deal, Gold Price Dips

Cyprus clinched a last-ditch deal with international lenders to shut down its second-largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion euro ($13 billion) bailout. That piece of so called "good" news caused Gold Price to dip below RM160/gram barrier for the first time. 

Gold price fell to a low of RM157/gram before making recovery to RM159.89/gram as of writing. Gold investors banking on the collapse of the Cyprus bailout were left disappointed as the previous one week gain in gold price were wiped out within a day. 

With the Cyprus crisis temporarily averted, there is not much action to be seen from gold. Overall outlook of gold price remains uncertain and could stagnate at this price range for the next couple of months unless some unfavorable data are released by the Feds or another Euro country springs a  debt crisis surprise.

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22 March 2013 - Cyprus Crisis Will Continue To Push Gold Price Up

There's no firm decision yet on what is the solution to prevent Cyprus from going into bankruptcy. Lawmakers at Cyprus had on Tuesday voted out the option of taxation of bank savings in order to generate the 5.8 billion euro required to trigger the 10 billion euro emergency funds from European Central Bank. 

Banks in Cyprus have remain closed since Monday to prevent panic withdrawal and ATM's are only allowed to dispense limited cash per person, per day. The worry on the Cyprus crisis is highlighted by this statement from Stephane Ekolo, chief European strategist at Market Securities, London;

Due to the ongoing Cyprus issue, gold price has stayed above the RM160/gram level since Monday. If the situation at Cyprus is resolved, gold price should remain stagnant at this range. On the other hand if the crisis is unresolved, investors will turn to gold at that should see the price of gold breaking the RM162/gram barrier.

Some key financial data as of 22 March 2013 to share:

Cheers and Happy Investing

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18 March 2013 - Gold Investing Updates

Spot gold price for Malaysia shot up to RM161.23/gram, breaching the RM160/gram barrier for the first time since late February 2013. The rise in Gold price today was a direct result from a surprise decision by Euro Zone leaders to provide a 10 billion euros bailout of Cyprus. The part of the rescue plan also involves implementation of taxation on bank deposits which will see citizens losing between 6.75% - 9.9% of their savings.

The bailout was deemed inevitable in order to prevent Cyprus from defaulting it's debts. The decision announced on Saturday caused stock markets around the euro zone to fall on the first day of trading and the euro vs the dollar fell to a 3 month low. German Bonds and Gold benefited from the lost of confidence among European investors as worries emerged on future possibilities of other bailouts.

Economist are also expecting the Feds to continue on the Quarterly Easing till the end of this year in a further bid to stimulate the fragile economy.

I expect that the gold price will continue to see recovery mainly due to sustained uncertainty and lost in investors confidence created from the bailout announcement. 

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Gold Price Forecast By Major Banks

Barclays Bank (UK)

March 15, 2013 ~ Latest

• 2013 Average Forecast - $1,646 per ounce
• 2014 Average Forecast - $1,600 per ounce

Goldman Sachs (United States)

Feb 26, 2013 ~ Latest

• 2013 Average Forecast - $1,600 per ounce
• 2014 Average Forecast - $1,450 per ounce

Merrill Lynch (United States)

March 7, 2013 ~ Latest

• 2013 Average Forecast - $1,680 per ounce
• 2014 Average Forecast - $1,838 per ounce

Nomura (Japan)

March 7, 2013 ~ Latest

• 2013 Average Forecast - $1,602 per ounce
• 2014 Average Forecast - $1,750 per ounce

Note : If you come across newer updates on the gold price forecast by Bank, just drop me a comment and I will make the necessary updates.

Thanks and Happy Investing!

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Is the Dow Jones Heading for A Major Fall?

Here's something of interest to share with Gold Investors. Yesterday, the Dow Jones finally lost it's momentum after notching 10 days of continuous gains. The Dow dropped 25.03 points, or 0.2%, to 14,514.11 at closing while spot gold price for Malaysia gained RM0.59/gram or 0.37% to close at RM159.60/gram.

The question on everyone's mind is what to expect of the Dow from Monday onward?

The Historical Rise and Fall of the Dow:

See the numbers 1 to 5 on the Dow Graph, for every new highs achieved by the Dow, it would followed by a major drop in the index. Let's take a look at each of it:

Number 1 : 14th January 2000 - The Dow hits 11,722.98 points

Number 2 : 9th October 2002 - The Dow falls to 7,286.27 (losing 36% from its 2000 record)

Number 3 : 9th October 2007 - The Dow hits a new high of 14,164.53 points

Number 4 : 9th March 2009 - The Dow falls to 6,547.05 (losing 54% from its 2007 record)

Number 5 : 5th March 2013 - The Dow hits a new high of 14,253.77 points

What's next? 

Trending wise for every new high The Dow hits, a major fall would be impending soon. Are you ready for it?

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Key Points About Gold from National Numismatics' Tom Cloud

Tom Cloud is the Vice President of National Numismatic Associates, Inc. The National Numismatic Associates, Inc is a Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers company located in Duluth, Georgia. In this post, I would like to share the key points from the interview he gave to 24hGold with regards to outlook on gold price.

Note : I would like to stress that Tom's opinions are rather one sided on promoting the sales of precious metals. However readers should read the key points from Tom and treat them as reference only.

Key points from the interview:

• I'm not sure that the bottom is in (for gold price), but it certainly will be between now and the 27th (March 2013) when the government raises the debt ceiling. In the meantime there's the possibility of gold going lower, maybe breaking down to $1,540.
• The fundamentals of gold price to go much higher is there. The event of the raising of the debt ceiling at the end of the March 2013 will likely spark a rise in gold price. History has shown that when the debt ceiling goes up gold and silver go with it.
• The debt ceiling is about the government's ability to borrow money. As long as they can borrow as much as they want and print as much dollars it takes to cover the borrowing debt, there will be no control over spending  The chances of raising the debt ceiling is very likely as the other alternative options are to close the government down or cut entitlements (both alternatives are politically impossible).
• China has increased its gold purchases for 13 straight months.
• The dollar has definitely been in a bull market the past few weeks. However the bull run will not last due to the amount of uncontrolled money being printed. This certainly points to an impending double digit inflation in the the long run.
• Mining costs are as high as they've ever been. One mining companiy recently stated that they need the gold price to go higher in order to operate a new mine. In away, that means lesser gold production and higher gold prices!

From the above, it seems that all the indicators that affect gold price are pointing to a rise in gold price. As the saying goes, we are all experiencing a calm right before the storm. When will the storm occur? Let's wait and see.

Cheers and Happy Investing!

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13 March 2013 : Gold Investing Updates

The Dow Jones yesterday posted its lowest % gain, making it 8 consecutive days of positive growth. As a matter a fact, the Dow has rose 10.3% in 2013 alone!. From the looks of thing, the so called "mini Dow train"  has finally slowed to a chugging speed albeit managing to equale the 8 day gain streak last seen in February 2011. The positive performance of the Dow has adversely caused the gold price to shed approximately 6.3% in 2013. 

What's there to expect next?

Analyst expect that the Dow will continue to post positive gains due to the recovery in housing market and a pickup in employment rate. Positive corporate earnings as well as the continuing Quarterly easing to stimulate the economy will continue to boost investor's confidence.

I don't expect the gold price recovery to happen anytime soon and should continue to dwell below the USD1600/oz range for the next couple of months. If the gold price breaches the USD1600/oz line, that is a good sign that gold price recovery is at hand.

Got an opinion to share about Gold Price? Join our forum for further discussion.

Cheers and Happy Investing!

11 March 2013 : Gold Investing Updates

7:00pm, 11 March 2013 : Spot gold price for Malaysia went up by RM0.38 (+0.25%) from previous close of RM157.37/gram to RM157.76/gram as of writing.

When the Dow Jones begin trading later tonight at 9.30pm Malaysian time, the encouraging US employment figures released last Friday should further boast the Dow's performance. Gold should react the opposite direction and see further decline in prices.

On the longer horizon, the facts and figures are not pointing to an immediate recovery of the US economy. Figures are not solid and the Fed is still pumping money into the economy via Quarterly Easing.

Ignore what politicians have to say as they know nuts about the fundamentals of economics. I might not be an expert in economics but the gut feeling from the figures release tells me there is a larger problem hiding behind the shadows and waiting too pounce. When money devalues, gold is king!

Here's a chart I wish to share, got any comments? Would love to hear your opinions and discussion at our forum.

Cheers and Happy Investing!

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9 March 2013 : Gold Investing Updates

The announcement of an unexpected jump in U.S. employment figures for February caused the world equity market to rally and also witness the strengthening of the US dollar on Friday. Most investor already holding gold would not welcome this announcement as there could be further drop in the gold price.

Key unfavorable data for gold investors:

• The Dow Jones industrial average posted its fourth consecutive intraday and closing record highs, while European shares and a gauge of global equity markets rose to their highest levels in more than 4-1/2 years.
• The dollar touched a 3-1/2-year high against the yen and a three-month peak against the euro
• U.S. unemployment rate fell to a four-year low of 7.7 percent last month.
• a 1.2 percent gain in U.S. wholesale inventories in January to $504.4 billion - the fastest pace of growth since December 2011

Favorable data for gold investors:

• Job market continues to move sideways at a frustratingly slow trend for the Fed. The length of time people are unemployed deteriorated, the number of discouraged workers increased, voluntary job labor fell and the labor force participation rate declined.
• This is report is not going to inspire any kind of change in monetary policy, it is certainly not going to inspire any kind of discussion to end Quarterly Easing earlier than expected.

Summary

Expecting a slight drop in gold price come Monday. Will continue to post updates when I get any.

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Key Factors That Affect The Price of Gold:

1. US Federal Government quantitative easing.

As long as the Feds continue their quantitative easing to boost the economy, gold price will benefit from the easing. Quantitative easing is an effort by the US Government to pump in more money into the economy to prevent the country from falling into a recession. 

Take for example in mid to late February when words spread that quantitative easing will be stopped earlier then planned. Investors begin diluting gold investment in exchange for cash for other investments as the economy is considered stable once the easing stops. That resulted in the gold price dipping to a record low of USD1572.30/oz. Gold lost about USD98.10 in a matter of 2 weeks during the month of February as shown below:

  

2. Recession and Low Interest Rates

If the United States fall into a recession, investors in general tend to move their money into safer havens such as Gold. That causes a rise in demand for gold, resulting in an increase of gold price.

3. Production Cost

Cost of mining gold has risen tremendously. Apart from the rise in hardware cost, overhead cost such as higher salary and health insurance tend to affect gold prices. It is said that if gold price falls below USD1600/oz, mining companies have no other choice but to reduce production as a cost cutting procedure. In fact during the 90's when gold price fell to USD250/oz, a lot of mining companies had to shut down.

Summary

The current key factor that gold investors are currently looking at is on how the quantitative easing will pan out. With money now being freely printed and the continue rise of United States debts, most gold experts (looking at the longer horizon) expect that a recession will be inevitable.

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UOB Gold Bullion Products

UOB range of Gold Bullion Products consist of:

Gold Bars

Gold bars (in 1kg only) are available at:

• Gold Department @ Jalan Raja Laut
• Jalan Tengah Branch
• Bishop Branch.
• Butterworth Branch

UOB also offer Gold Loan Facility to Jewellers and Goldsmiths for hedging purpose. 

Gold Bullion Coins

Types of coin available are:

Australian Kangaroo Gold Nugget 

Singapore Lion Gold Coin 

Canadian Gold Maple Leaf 

Swiss Pamp Gold 

Swiss Kinebar 

Commemorative Coins (seasonal)

• These commemorative coins are offered for a limited time only and include Chinese Zodiac coins (i.e. year of tiger, mouse and etc), Guan Yin coins, Buddha coins and etc.
• These coins are sold on subscription basis.
• No repurchase is allowed.

Contact:

Address:
Kuala Lumpur Main
Address Level 2, Menara UOB,
Jalan Raja Laut,
50350 Kuala Lumpur

Phone:
Call UOB Gold dealers at 603-2772 6551 during office hours.

After office hours, Call 24-hour UOB 121 Phone Banking Service at:

Kuala Lumpur +603 26128 121
Penang +604 2401 121
Johor Bahru +60 72881 121
Kuching +608 2287 121
Kota Kinabalu +608 8477 121

Email:
uob121@uob.com.my

UOB Daily Gold Bullion Coins Price:

Bank Negara Malaysia - Kijang Emas Gold Bullion Coin

Description:

Malaysia is the 12th country in the world to issue its own gold bullion coin. The Kijang Emas now joins the ranks of other international gold bullion coins.

The design of the obverse of the Kijang Emas depicts a barking deer ("kijang") in its natural habitat in the Malaysian jungle. The reverse side features the hibiscus, the national flower of Malaysia.

1 Troy ounce

Face value: RM200 Gold Purity: 99.99% Standard weight: 31.105g Diameter: 37.00 mm

1/2 Troy ounces	1/4 Troy ounces
Face value: RM100 Gold Purity: 99.99% Standard weight: 15.550g Diameter: 28.00 mm	Face value: RM50 Gold Purity: 99.99% Standard weight: 7.780g Diameter: 22.00 mm

The Kijang Emas is minted by Kilang Wang Bank Negara Malaysia and distributed by Maybank Berhad, which will also entertain further enquiries.

Today's Rate for Kijang Emas Gold Bullion Coins from Bank Negara Malaysia:

Maybank - Kijang Emas Gold Bullion Coins

Fineness/Gold purity:

99.99%

Available sizes:

1 oz, 1/2 oz, 1/4 oz

Description:
The design on the obverse of each coin depicts a barking deer - "kijang" in its natural habitat in the Malaysian jungle. The reverse features the hibiscus, the national flower of Malaysia.

1 troy ounce = 31.1034768 grams.

How to buy and sell:

• The Kijang Emas is priced at the daily gold market share. 
• The price is quoted daily and pegged to the international gold price to facilitate buying and selling
• The Kijang Emas can be purchased individually or as a set at 32 selected Maybank branches.

Today's Rate for Kijang Emas Gold Bullion Coins from Maybank:

Available only at 32 selected Maybank outlet. Click HERE to find out the nearest one to you.

Daily Paper Gold Prices

Comparison of Buying-Selling Paper Gold Prices Among Banks

As of writing, there are currently 5 banks that offer their account holders the opportunity to invest into Paper Gold. The 5 banks are:

• UOB Bank (UOB Gold Savings Account)
• CIMB (CIMB Gold Savings Account)
• Public Bank (Public Bank Gold Investment Account)
• Maybank (Maybank Gold Investment Account)
• Kuwait Finance House (KFH Gold Account-i) 

*click on link to find out more information about that gold savings/investment account

When deciding to purchase paper gold one of the key factor to consider is the "Difference between Selling and Buying Price offered by the bank".

Lower price difference between selling and buying price allows investors to benefit from the following:

• Earn higher returns.
• Quicker recouping of investment when gold price rises.

However, I would like to remind that this is just one of the key factor when considering which bank you would like to open your gold investment account with. Other factors such as convenience in buying and selling (e.g via online), availability of funds in that bank and having a single bank account to manage all your investment should be taken into consideration as well.

Comparison of Buying-Selling Paper Gold Prices Among Banks

Paper Gold Comparison - price RM per gram
	Selling*	Buying*	Difference	% Difference
UOB Bank	164.70	162.70	2.00	1.23%
CIMB	165.30	159.70	5.60	3.51%
Public Bank	166.47	159.93	6.54	4.09%
Maybank	165.94	158.99	6.95	4.37%
Kuwait Finance House	166.90	159.30	7.60	4.77%

*Buying and Selling Price as of 19th February 2013

Kuwait Finance House Gold Investment Account

Kuwait Finance House (KFH) is the first foreign Islamic bank in Malaysia that offers investors an opportunity to invest in paper gold. The Kuwait Finance House Gold Investment Account also know as KFH Gold Account-i allows investors to conveniently invest and trade in Gold according to the Shariah Concept of Bai' As-Sarf & Qardh. The account allows investors to track and plan their investments as all trades are recorded in the account statement.

Benefits:

• Enjoy peace of mind when you purchase gold without having to keep the physical gold.
• Withdraw the physical gold on the spot or have the Bank retain the gold under Qardh concept.
• Purchase/Sale can be arranged via debit/credit from your KFH Savings Account-i or KFH Current Account-i.
• Affordable initial deposit as low as 10gm (for individuals/joint) & 50gm (for non-individuals)
• Opportunity for capital gain if gold price appreciates.
• No charges imposed on safekeeping and withdrawal
• 24-hour Customer Contact Centre

Purchase of Gold:

Initial:

• Individuals / Joint: 10gm, in multiple of 1gm
• Non-Individuals: 50gm, in multiple of 1gm

Subsequent: 1gm, in multiple of 1gm

Fineness of Gold:

995.0

Denomination:

1, 5, 10, 20, 50 & 100 gm

Eligibility:

Individual / Joint Account

• Male & Female individual who have attained the age of 18 years old
• Malaysian citizen, permananet resident or non-resident

Non Individual Account

• Non Individual such as associations, societies, companies, or other business entities that KFH Malaysia finds suitable or acceptable

UOB Gold Savings Account

The UOB Gold Savings Account (GSA) is one of the two types of gold investment account offered by UOB. The other type of account available for investors is called UOB Premier Gold Account (PGA). The main difference between GSA and PGA is the minimum amount of gold you can purchase per transaction. Another key point to highlight for purchasing gold from UOB is the low price difference between buying and selling. This allows investors to make more gains when gold price appreciates.

Benefits:

Secure, hassle-free investment
• You can invest in gold without the inconvenience of storing and transferring the physical gold, or worry about the security of holding it.
• The account is reflected in your statement.

Low price spread
• The difference between buying and selling prices is low.

Conversion to physical gold
• You may convert the gold purchased under Premier Gold Account and Gold Savings Account to physical gold (subject to our approval). A nominal conversion fee will be charged for the conversion.

Instant liquidity
• You can cash in your investment any time during banking hours. 

Rates and Fees:

	Premier Gold Account	Gold Savings Account
Minimum Initial Investment	1kg	20 gm
Minimum Subsequent Investment / Withdrawal	In multiple of 1 kg	In multiple of 5 gm
Minimum Balance in the Account	1 kg	10 gm
Fees And Charges	An administrative fee of RM2.00 will be charged per month if the balance of the account falls below 1kg at month end.	An administrative fee of RM2.00 will be charged per month if the balance of the account falls below 10gm at month end.
Account Opening Requirement	Prior to opening a Gold Investment Account, the investor is required to maintain either a savings account or current account in RM to facilitate payment for purchases, collection of sales proceeds and debiting of fees and charges.

Contact to inquire about UOB Gold Savings Account
To obtain more information, please visit your nearest UOB Branch or Contact our 24-hour UOB Call Centre Service at:

Kuala Lumpur +6 03-26128 121
Penang +6 04-2401 121
Johor Bahru +6 07-2881 121
Kuching +6 082-287 121
Kota Kinabalu +6 088-477 121