Are We Good Gold Investors?

Question 6: Is Malaysia a good example for gold and silver market?

Answer 6: We Are Progressing –
I think Malaysians are becoming more aware of gold as an investment. This is evident as we now have more brokers supplying investment-grade gold and silver bullions to local investors. Local banks have introduced gold accounts. Bursa Malaysia had launched trading of gold futures in 2013. These are encouraging signs of demand in Malaysia.

Lacking in Education –
However, I believe there is inadequate amount of education to further enhance the public’s knowledge on gold. Most investors are fixating their eyes onto prices only. When gold was climbing towards US$ 1,900 per ounce, the metal was the ‘flavour-of-the-month’. However, many shun away from gold when prices became depressed. Education, research and data are important to help investors in making better investment decisions on gold and our country is lacking in this department.

Conned by Schemers –
As a result, many are lured into gold schemes which were set up to profit from ignorance. The idea of receiving regular income from gold has become popular. This is absurd. It has fooled many Malaysians, including highly-qualified professionals such as accountants which are financially more knowledgeable. Geneva Gold was a hot topic when it was raided by Bank Negara Malaysia. There are gold operators that still provide regular income to their members and yet, there are people who are buying them.

Room for Growth –
As Ringgit’s value continues to drop, there are room for growth in the Malaysian gold investment market. Most brokers have operations in the Klang Valley and in Penang. Even so, they do not have offices across Malaysia. Hence, it does not facilitate ease of trading and investing throughout the nation. The exception is for Public Gold.

However, Public Gold Bullion products are not as recognized as international brands such as PAMP Suisse Gold Bars, American Gold Eagle and the Canadian Maple Leaf. So, I think the gold and silver market in Malaysia is still relatively underpenetrated.

Strategic Location –
Fortunately, Malaysia is strategically located to participate in the thriving gold market across Asia. To the north, China is the world’s largest gold producer and is the fastest growing gold market in the world. To the west, India is the 2nd largest gold buyer in the world, only second to China.

Within ASEAN, Thailand, Vietnam and Indonesia are among the top 10 buyers of gold in the world. To the south, Australia is among the largest gold producer in the world. Perth Mint is recognized as one of the world’s major gold refinery and mint. Asia is the center of today’s vibrant gold market.

Despite the vibrancy, Malaysia is slow to react. Singapore is quicker and is building storage spaces and refineries to encouraging gold to flow into the city nation. Singapore has a target to transform itself to be a regional gold trading hub, rivalling London and Zurich. Gold may be an opportunity lost for Malaysia.

This article is contributed by bestselling book author, Ian Tai. Want to learn more about gold and silver investment? Get Ian’s free training at Gold Silver Method.