I taught some people say bank is not safe...
Shoe box better.

Just my guess,
Gold account has been growing quite rapidly,
It may because bank won't hedge against your gold account with physical in hand, they also scare to store too many tonnes of gold in their HQ, most banks hedge using derivatives, gold futures etc.
It is wise for bank to store a few tonnes whenever customer put money in gold saving account?
Also, with so many gold account nowadays, if just 10% of the account holder demanded 100gram, 50 gram, 1kg, here and there, can cause a lot of hassle, havoc, and security risk for bank to deliver the physical gold, couple cost associated with it in the process of letting customer to convert.

They might earn little from the spread, but those troublesome process of converting can be too costly.

Physical in shoe box rulez.

This post has been edited by cherroy: Dec 20 2011, 02:41 PM

They have people convert all their money to gold?
People say BRIC has big future, and their economy are doing good and has tremendous future. Russia is one of BRIC.
They have no deflation because economy is growing.
I can assure you if everyone convert all their money, deflation will occur.

Gold cannot work in current economy one.
Ancient people already realise, that's why they ditch gold long long time ago.

Gold standard only applied on USD, non of other currency is "gold backed" even before 1971.

Ya, inflation is at risk, that's why I like paper gold. I never say inflation is not at risk, I deeply worry about inflation.
While, I am not saying cash vs gold.
The issue is all about paper gold vs physical gold.
Why so many people quoted the inflation story to counter my point?

Bring in inflation story doesn't alter paper gold also gain/hedge the same with physical, except added in you need to trust the bank obligation to pay you.
While paper gold eliminate ordinary theft, disaster (Tsunami, flooding), etc risk.

It is all about paper gold vs physical advantage and disadvantage.

I just view, paper gold has its advantage, and my personal view, its advantage is enough to counter its disadvantage of potential of bank default.
I am ok other disagree on it, I don't force my view, just totally discredit paper gold is totally useless and risky somehow, I feel not right, both have their advantage and disadvantage.

Yes, many buy gold for inflation hedge, but they do not fully hedge you inflation even until now, history does not lie.

While. central banks buy gold is not about inflation, central banks buy gold because they have too much USD, and hedge against USD downside risk.

This post has been edited by cherroy: Dec 20 2011, 03:09 PM

1) Paper gold - risk of default
Physical gold - risk of being cheated in term of purity, theft, or missing entire physical gold bar.

2) So far people reported in this forum, PBB can.

3) Nobody knows the ROI, it all depended on whether gold price will rise or not, and rise how much. We have 1980 to 2002, gold yield Zero return.
While from 2004-2011, yield magnificent return.

4) This is billion dollar question.

I never say paper gold is not without risk.

Some gold account already stated gold account cannot convert to physical gold, it is all about fiat money (investment) all the while, aka in the form of investment that tie to gold pricing.

If there is no default, if physical earn your RM1000, paper also earn you Rm1001 (due to lower spread, low maintenance cost, like safe deposit, shoe box etc.)
If the gold account stated no conversion is allowed, the risk of mentioned default due to gold conversion rush is not there to start with.

Fiat system has been there long long time.
Even you used 1971, until 2011, it has been 40 years, and not fail (or yet).
Another 40 years wait?
I don't know, I only know, I may be have another 1 x 40 years only the most.
I cannot wait that long.

If bank uses every penny of gold account with physical backing, they will out of business without charging enough spread, current a few RM spread is not enough to cover the cost.

Yes, I also wish to see it, to stop excessive money printing.

But a lot of talk only remain as talk only, when thing stablise, 99% everything forgotten.
See when global financial crisis on its height time, people said must reform the financial system, too big to fail, systemic risk need to eliminated etc.
Speculation, too lenient financial practice can cause bad etc, need tighter regulation.
Now thing stablise already, where is the reform?
Where is regulation to curb speculation?

Yes, gold standard is good, but it also create lot of problem for current economy.

Do you believe it will be adopted?

LOL, supporter?
Who need supporter?
This is not a war, more supporter win?
This is not win, lose or draw.
The is discussion all along, why need supporter when I am posting, is fact, and reality out there.

Need supporter to claim physical gold is better than paper gold?

Me already being convinced stored a kg of physical in shoe box...when I afford time.

---

Added on December 20, 2011, 10:18 pm2) please get your fact right, gold never earn you a single cent of interest.

This post has been edited by cherroy: Dec 20 2011, 10:18 PM

Are you sure Ron Paul will do it?
I taught Obama said before being elected, said rich shouldn't enjoy tax cut and should be taxed more, or no?
I only knew, Bush tax cut being extended across,
or my memory kaput already?

Enough gold or not to back trillions of USD out there?

You don't need rocket science if every penny need to be backed by gold, we will have problem in current financial system or economy.
Simple example, festival time, when most people want to get new money note for green packet, red packet, BNM tell you, hey not enough gold, so cannot print money, use your old money.
or
one going to bank to get a housing loan, sorry, cannot give you loan, BNM has not enough gold to create/print new money. So house nobody can buy except buying with full cash, economy stalled.
Economy stalled, public suffer/angry, still got political power?

Ok, no point saying, let wait and see, very fast 2012 already may know the result.

1) & 2) Yes, that's the kind of statement is that I want to highlight.
Both side of risk involved for paper and physical.

Paper gold and physical gold has same value if nothing goes wrong aka default.
Paper gold + trust (no default) is equivalent to physical gold.
I use the word equivalent (not same), as it is in money term.

They do not have different value in money term.
When Comex gold futures is USD1600, it means physical gold trade will be follow USD1600 pricing.

Either Paper gold totally lost the value (default), or same value with physical (no default),
the difference is between either same or zero.

I don't know why you all want to convince me to turn paper gold into physical, I fully aware the risk of default.
I may convert or invest in physical, which depended on situation and financial condition out there, who knows?
I thanks you all to share the physical advantage story as well.

My view, despite debt problem around, the chance of default of paper gold is slimmer than plane crash. The highly solution is to let inflation solve the debt problem on its own, inflation means all asset class price inflated, including gold, and paper gold.
Inflation doesn't mean bank must be defaulted, instead inflation can solve the debt problem, and banks can earn even more money in the process.

Do I worry of bank default? Can bank default?
Yes.
But I don't scare of plane crash until don't want to ride a plane.

You don't know the experience others went through, especially last 20-30 years time, whereby gold has fail misery to hedge against inflation even until now, as well as experience of theft, natural disaster and other issue, that has driven some people into paper gold instead of physical.
Yes, physical storage risk can be controlled up to certain extend, but I do not agree can be totally controlled as well, same like bank default that out of our control.

I hope this end the debate paper vs physical.
I never said paper gold is best, nor physical is totally risky, I just offer some view on it.

This post has been edited by cherroy: Dec 24 2011, 11:37 AM

I don't know, but some expert or guru said so.

I only know cash in house is more risky than cash in bank.
May be my house is too poor...

Physical pricing is following paper pricing one.
When Comex gold futures traded at USD1570, all physical follow this pricing one as benchmark, unless you finding some "water fish" that buy from you, at USD2000 + spread/margin.

Unless those are gold coin antique type one then difference story.
For ordinary gold bar, it follows paper gold pricing.

---

Added on December 29, 2011, 1:40 pmOr he/she becomes trader oneself, aka gold bar seller like goldsmith.
Then can loh.

---

Added on December 29, 2011, 1:42 pmBro, they are talking paper gold from UOB, whereby spread only Rm2, or Rm1 if you open the premium gold account.
They are not comparing physical gold from UOB.

This post has been edited by cherroy: Dec 29 2011, 01:42 PM

I think 1000000x times already.
Yes, it is 99.9% safe, no money, print the money, problem solved.
Life goes on, dance goes on, party goes on.

Gold doesn't yield any interest rate one.
Gold investment is about gaining money from price appreciation of gold itself.
Gold doesn't yield you a single interest rate, nor can "grow".
A 1kg of gold remain 1kg forever.

This post has been edited by cherroy: Jan 27 2012, 12:02 AM

Selling at RM200, but offer to buy back at RM180, (this buy back generally may only valid from the entity sold to you, but outside real market price may be around RM160-170)
vs
bank selling at RM170, buy back at RM168.

hmmm, which one is better?
It is up to individual opinion, I won't comment which one is better.

Banks wind up due to cash flow problem?
Yes, it can by 2 possibility, interbank credit freeze up (like 2008) + central bank refuse as last lending resort (never happen)
This risk, yes, do exist, but very very minimal, chance even less than plane crash, titanic sink.

If one can buy 1kg of gold bar, one option is through UOB gold premium account, that only has a spread of RM1, and this can be converted physical.
Cheaper, easier and reputable.

PS: don't mean to promote it.

---

Added on January 27, 2012, 4:08 pm1kg of pure 999 gold from A shop
vs
1kg of pure 999 gold from B
is the same and has same value.

Why pay more?

A 15% more in spread means 1kg of gold difference in price paid can mean RM20+K.
Trivia?
Ok...

This post has been edited by cherroy: Jan 27 2012, 04:08 PM

95% of people money is in the bank...
be it FD, saving, gold investment account, even UT as nominee.
Almost all shit inside?...

Can I say, don't be con by buying price as well?

Buying 1kg of gold from a single entity of gold jewellery shop at RM200, which the only sole single entity offer buying back at RM180 (hypothesis case, not mean to say which or who), while outside only accept at Rm150~160, aka the real actual worth of gold or market price of gold,
is not considered invest all shit in single entity or single asset (gold) that can be stolen overnight all together?
Just joking.
I don't know how the offer will change or not, if price really plunge to Rm100. Black and white obligation for sure and forever Rm180?

The real worth of gold at today is USD 1720/ounce or near around RM170/g in the real market, end of story. This is the ultimate basic, don't need to say con by selling price or buying selling either.

My personal view, the risk taker is the one invest in gold actually,
especially physical bar at home.

US insurance issue?
AIG did not go under, what insurance issue?
Hong Kong investment bank? Which one?
Never mind also which one, we are talking on retail commercial bank, not investment bank.

Yes, gold can be a good investment class in current financial market environment, but I always view that you don't need sending fear this bankrupt, that bankrupt to promote or advise people to invest in gold.
Ya, those risk does exist, but at minimal and wherever you put your money, your gold risk is everywhere and can be as same as bank go under risk.
Personally, I don't like using fear to promote, instead should create awareness about the pro and con, what to expect, is enough to educate people and whether others like or not like to invest is another issue altogether.

This post has been edited by cherroy: Jan 28 2012, 01:26 AM

No.
It is totally unknown territory.
It can 100x better than FD
It can be at par.
It can be worst.

Unless one has the crystal ball, which I don't have, so never state such a statement to start with.

It may happen, if
no more QE,
no more cheap interest rate,
economy back on track, and little fear around the financial condition,
deflation occur.
etc.

Gold price fare worst than FD from 1980 to 2004, about 25 years.
Gold price performs many many times better than FD from 2004 up to now.

Please do not post you fool, your stupid, kind of statemnet, it doesn't make one more "clever".

Stick to the point, not the person, if disagree other opinion/view, just said disagree, and posted why disagree on that matter due to xyz reason.

Just because others have different opinion, whether it is right or wrong, it is not right to say other is fool, just posted why it is wrong,.
Further attack on personal instead on facts, points post will be deleted and warning may issue by staff.

Thank you for the cooperation.

Outside buy based on market price one.

For eg. now market price of gold is Rm170/g for today, nobody will sell you below RM170 today. Banks can sell you at Rm175, jewellery shop can sell at retails jewellery price at RM199.
Impossible to make instant abitrage the to make a profit.

But next day price go up Rm180 that lead one make profit, is another story already.

Selling is always market price + spread charging
Buying price is always market price - charging.

Those so called "scheme" that posted before, by shops offer sell high and buy higher than market price won't get away the basic pricing.

Sell at you at Rm199, but offer to buy back from you at Rm180 only applied if you bought from them at RM199.
If market price out there is RM170, outside only accept buy back no more than Rm170.

Can you buy from outside at Rm175 to sell to them at Rm180? Certainly no.

Ya, most stable from 1980 to 2004, same price throughout.

Industrial use of gold is minimal, most gold ended with gold bar, jewellery only.
Industrial demand is not the driving demand for gold.