Financial turmoil has created havoc on the prices of equities. Even currencies are not spared as the crisis deepened. Recently GBP Sterling and EU Euro tumbled against major currencies, thus projecting a volatility in currencies trading.
Gold spot price was about USD850 one week ago, now rallying to highs in terms of GBP and Euro, breaking above USD900. For Britons who bought into gold, they are the clear winners. Can gold perform as a currency hedge.?
I bought my first gold coin from UOB way back around year 2000 after attending a seminar by a Christian economist Dr. Norman Franz who commented that the price of gold will soar on account of the liquidity being pumped out by the US Treasury. Fiat monetary system.
The price of the 1 oz Gold Maple Leaf (GML) at that time = RM1,000. The UOB teller commented my GML was the only one left after frenzied buying by the gold enthusiasts.
Fast forward to year 2007 & 2008.
Physical gold coin price touched RM2,800 then RM3,000 then RM3,300 then RM3,600. I began buying again as and when the coins became available due to people selling on profit on the uptrend.
I bought further when gold went into a violent downward correction with spot price hitting USD800. UOB was selling physical coin at about RM2,900 then RM2,800 then RM2,700. I bought in heavily at an average of RM2,850 per 1 oz of GML coin.
Physical gold coin 1 oz GML sells for RM3,200 on average, up 12% from RM2,850.
Buy on weakness of gold price in MYR. Collect some gold coins in the buying range of RM2,800 to RM3,000. Take a closer look now and prepare your cash to buy.
p/s: Gold coins is better to hold than currencies now as rates cut by banks all over will have a negative effect on their currencies.