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Tuesday February 27, 2007

Bullish about bullion

By EDWARD RAJENDRA

newsdesk@thestar.com.my

KLANG: Soaring gold prices have led to a new trend among buyers, who are now buying more bullion in the form of coins.

Malaysian Indian Goldsmith and Jewellers Association adviser N.P. Raman said, “Many regular buyers are now beginning to look at gold purely as a financial asset, adding to their investment portfolio.

“Many women now choose to buy gold coins or even bars as investment, instead of jewellery as jewellery adds 25% to 30 % to the cost, to cover craftsmanship,” he said.

Highly priced: More buyers are now converting their cash into gold, and buying ingots and coins.
Raman said the current investment-led buying has led jewellery shops in the Indian business enclave of Jalan Tengku Kelana here to display more gold coins.

“Before the prices started to climb, we had two different types of buyers – the ones who bought gold to convert it into jewellery for special occasions, and young executives who buy gold for capital appreciation,” he said.

Raman said parents are now saving in gold coins as an alternative to traditional insurance policies that tied them for a stipulated period.

Some people were even buying gold coins on an instalment basis, by “depositing” cash with goldsmiths every month.

“People are not waiting to see if the market is going up or down but are buying bullion as it is considered a hedge against inflation. Market watchers anticipate that the price of gold may surge to US$800 (RM2,794) an ounce soon, due to Middle-East tensions,” he added.

The price of gold yesterday closed at RM78 per gram.

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