Harga Kedai Emas

999 : RM 205.00/gram

950 : RM 198.00/gram

916 : RM 195.00/gram

835 : RM 176.00/gram

750 : RM 159.00/gram

Why Invest in Gold

Why Holding Gold in Your Portfolio Isn't Advisable... It's a Must

15 Fundamental Reasons to Own Gold

1. Global Currency Debasement
The U.S. dollar is fundamentally and technically very weak and should fall dramatically over the next few years. However, other countries are very reluctant to see their currencies appreciate and are resisting the fall of the U.S. dollar. Thus, we are in the early stages of a massive global currency debasement which will see tangibles, and most particularly gold, rise significantly in price.

2. Rising Investment Demand
When the crowd recognizes what is unfolding, they will seek an alternative to paper currencies and financial assets and this will create an enormous investment demand for gold. Own both the physical metal and select mining shares.

3. Alarming Financial Deterioration in the U.S.
In the space of two years, the federal government budget surplus has been transformed into a yawning deficit, which will persist as far as the eye can see. At the same time, the current account deficit has reached levels, which has portended currency collapse in virtually every other instance in history.

4. Negative Real Interest Rates in Reserve Currency (U.S. Dollar)
To combat the deteriorating financial conditions in the U.S., interest rates have been dropped to rock bottom levels, real interest rates are now negative and, according to statements from the Fed spokesmen, are expected to remain so for some time. There has been a very strong historical relationship between negative real interest rates and stronger gold prices.

5. Dramatic Increases in Money Supply in the US and Other Nations
Authorities are terrified about the prospects for deflation given the unprecedented debt burden at all levels of society in the U.S. Fed Governor Ben Bernanke is on record as saying the Fed has a printing press and will use it to combat deflation if necessary. Other nations are following in the U.S.'s footsteps and global money supply is accelerating. This is very gold friendly.

6. Existence of a Huge and Growing Gap between Mine Supply and Traditional Demand
Mined gold is roughly 2,500 tons per year and traditional demand (jewelry, industrial users, etc.) has exceeded this by a considerable margin for a number of years. Some of this gap has been filled by recycled scrap but central bank gold has been the primary source of above-ground supply.

7. Mine Supply is Anticipated to Decline in the next Three to Four Years.
Even if traditional demand continues to erode due to ongoing worldwide economic weakness, the supply/demand imbalance is expected to persist due to a decline in mine supply. Mine supply will contract in the next several years, irrespective of gold prices, due to a dearth of exploration in the post Bre-X era, a shift away from high grading which was necessary for survival in the sub-economic gold price environment of the past five years and the natural exhaustion of existing mines.

8. Large Short Positions
To fill the gap between mine supply and demand, Central Bank gold has been mobilized primarily through the leasing mechanism, which facilitated producer hedging and financial speculation. Strong evidence suggests that between 10,000 and 16,000 tons (30-50% of all Central Bank gold) is currently in the market. This is owed to the Central Banks by the bullion banks, which are the counter party in the transactions.

9. Low Interest Rates Discourage Hedging
Rates are low and falling. With low rates, there isn't sufficient contango to create higher prices in the out years. Thus there is little incentive to hedge and gold producers are not only not hedging, they are reducing their existing hedge positions, thus removing gold from the market.

10. Rising Gold Prices and Low Interest Rates Discourage Financial Speculation on the Short Side.
When gold prices were continuously falling and financial speculators could access Central Bank gold at a minimal leasing rate (0.5 - 1% per year), sell it and reinvest the proceeds in a high yielding bond or Treasury bill, the trade was viewed as a lay-up. Everyone did it and now there are numerous stale short positions. However, these trades now make no sense with a rising gold price and declining interest rates.

11. The Central Banks are Nearing an Inflection Point when they will be Reluctant to Provide more Gold to the Market.
The Central Banks have supplied too much already via the leasing mechanism. In addition, Far Eastern Central Banks who are accumulating enormous quantities of U.S. Dollars are rumored to be buyers of gold to diversify away from the U.S. Dollar.

12. Gold is Increasing in Popularity
Gold is seen in a much more positive light in countries beginning to come to the forefront on the world scene. Prominent developing countries such as China, India and Russia have been accumulating gold. In fact, China with its 1.3 billion people recently established a National Gold Exchange and relaxed control over the asset. Demand in China is expected to rise sharply and could reach 500 tons in the next few years.

13. Gold as Money is Gaining Credence
Islamic nations are investigating a currency backed by gold (the Gold Dinar), the new President of Argentina proposed, during his campaign, a gold backed peso as an antidote for the financial catastrophe which his country has experienced and Russia is talking about a fully convertible currency with gold backing.

14. Rising Geopolitical Tensions
The deteriorating conditions in the Middle East, the U.S. occupation of Iraq, the nuclear ambitions of North Korea and the growing conflict between the U.S. and China due to China's refusal to allow its currency to appreciate against the U.S. dollar headline the geopolitical issues, which could explode at anytime. A fearful public has a tendency to gravitate towards gold.

15. Limited Size of the Total Gold Market Provides Tremendous Leverage
All the physical gold in existence is worth somewhat more than $1 trillion U.S. Dollars while the value of all the publicly traded gold companies in the world is less than $100 billion US dollars. When the fundamentals ultimately encourage a strong flow of capital towards gold and gold equities, the trillions upon trillions worth of paper money could propel both to unfathomably high levels.

Conclusion
Gold is under-valued, under-owned and under-appreciated. It is most assuredly not well understood by most investors. At the beginning of the 1970's when gold was about to undertake its historic move from $35 to $800 per ounce in the succeeding ten years, the same observations would have been valid. The only difference this time is that the fundamentals for gold are actually better.

GCP

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Gold Bar GCP 20g                      - RM 3600.00
Gold Bar GCP 10g                      - RM 1800.00

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Does Gold Still Sparkle for Morgan Stanley and Germany?

Wednesday March 07, 2012 16:03

It has been a rough week for precious metals.  On Tuesday, renewed Greek concerns drove gold down $32 to close at $1,672.10 per ounce.  It was gold’s lowest close and first time settling below $1,700 since late January.  Meanwhile, silver fell 91 cents to end the day at $32.78 per ounce.  Although gold prices have pulled back recently, Morgan Stanley and Germany appear to still have plenty of interest in the precious metal.

Morgan Stanley still believes there are four main pillars that gold’s bull market will rely on to climb higher.  The first pillar involves the decline of producer hedging.  A miner seeking to protect itself from a falling gold price may choose to sell anticipated production for delivery at a future date, adding more gold supply into the market.  Although producer hedging increased for the first time in a decade last year, it is not expected to have a material impact.  The World Gold Council explains, “Hedging as a source of supply is expected to stay muted as the practice of wholesale industry-wide hedging activity has proved damaging to the industry in the long run.”

The inability of gold mining companies to increase gold supplies materially is also a pillar of strength for the gold bull market.  With gold prices reaching a new all-time nominal high last year, gold production also reached an all-time high of 2,810 tonnes.  However, this only represents a 4 percent increase from 2010.  Furthermore, mine production only grew 2 percent in the fourth quarter of 2011, signaling that miners will dial back as gold prices dip.  Labor, energy and infrastructure issues in regions such as South Africa also dampened mine production.

The last two pillars of strength involve gold demand by emerging central banks and investors.  Not only have central banks dramatically scaled back gold sales, but they have turned into net buyers.  In the past two years, central banks have purchased more than 500 tonnes of gold.  “The net buying trend which started in Q2 2009 has proliferated, as emerging market central banks have continued to add gold on increasing concerns about the creditworthiness and low yields of their existing reserve assets.  Both the euro area sovereign crisis and the sovereign debt downgrade in the U.S. during the summer of 2011 have compounded these worries,” states WGC.  Meanwhile, investment demand for gold reached a record of 1,640.7 tonnes in 2011, representing a 5 percent increase from the previous record of 1,567.5 tonnes set in 2010.

As the financial markets remain in turmoil, central banks and investors will turn to gold as a hedge against the wall of worry facing the world.  Earlier this year, Venezuela’s central bank received its last shipment of gold bars in a move that repatriated 160 tonnes of the precious metal held abroad.  Apparently, with Greece and other countries teetering on the edge of the financial cliff, Germany is becoming increasingly concerned with its own gold reserves.  According to German newspaper Bild, German lawmakers are planning to review Bundesbank controls of and management of Germany’s gold reserves.  GoldCore reports, “There is increasing nervousness amongst the German public, German politicians and indeed the Bundesbank itself regarding the gigantic risk on the balance sheet of Germany’s central bank and this is leading some in Germany to voice concerns about the location and exact amount of Germany’s gold reserves.”  According to the latest data from the WGC, Germany holds nearly 3,400 tonnes of gold, representing 71.4 percent of its reserves.  It is believed that more than half of Germany’s gold is held in storage facilities outside of the country, in places such as the Federal Reserve Bank of New York.

By Eric McWhinnie

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