Among various kinds of investments, gold is one of the most popular choices of many investors. As the situation around the world is getting better with the borders reopening, experts are predicting a rise in the demand for gold.
Many investors consider gold as a haven during a time of crisis: a quality that might be the reason behind gold’s popularity. At the same time, gold prices tend to see an upward trend in the long run. This is due to the limited availability of this commodity. Since old remains unaffected by declining stock prices, many investors use this commodity to add a diversity factor to their portfolio. Currently, gold is valued at approximately MYR 256 per gram in Malaysia.
1. Ways to Invest in Gold
If you are looking for ways to try investing in gold, there are several of them that you can opt for. These methods include both investing in physical gold as well as investing in gold online.
- Gold jewelry is a popular method utilized by people to invest some money in gold. Although pieces of jewelry are not made with pure gold, they can still be worn and used daily. There are some downsides to investing in gold jewelry like making charges and fear of a decrease in value due to wear and tear.
- Although gold bars and coins were used as currency many years ago, it is used as a form of investment in the modern world today. Gold bars and gold coins are also easier to liquidate and can be stored inside bank lockers by paying some bank charges. Since gold coins are smaller in size than gold bars, it is easier to buy and sell gold in small quantities for an investor. The Central bank of Malaysia especially mints the KijangEmas coins in denominations of 1/4 oz, 1/2 oz, 1 oz.
- Gold ETFs are traded on the stock exchange and are a cheaper option to invest in gold than buying physical gold. It works based on domestic gold prices which can be volatile as the prices of stocks. You can easily find Shariah-compliant ETFs on the Bursa Malaysia.
- Gold mining stocks are invested directly in the gold mining company. This is a great way to invest in gold without actually purchasing physical gold. At the same time, you will also end up avoiding storage expenses. You need a broker or a trading platform to invest in gold mining stocks and ETFs.
2. How to negotiate and sell gold?
Since the prices of gold are always fluctuating, it is always advisable to know the current and the right price of gold in the market. Understand what is spot price is along with the making charges that the gold merchant might deduct from the gold price. This will help you to negotiate gold prices while buying or selling.
An important to remember is that gold jewelry is not made from pure gold. It normally has some other metal mixed with it for durability. This means that you will only receive the price according to the karat of gold inside the jewelry.
The reputation and authenticity of the dealer are also very important. It is vital to check the certifications and authenticity of the dealer before buying or selling gold in the market.
Also read: negotiating gold prices
The price of jewelry or the gold bars and coins will also depend on how they were manufactured. If they were manufactured with the help of machines, the price will be lower than the more intricate and handmade ones.
Additionally, if you are in need of temporary cash, you can use your gold for Ar-Rahnu. This is a shariah-compliant gold pawning system that is free from interest. The loan can be taken up for 1-6 months and the borrower needs to only bear the loan amount and safekeeping amount.
While selling the gold jewelry or gold commodities, you can negotiate with the jeweler on the additional expenses. It is very important to buy gold with the authentic Karat mark and the registered trademark. After you have decided on your jewelry piece, it is important to get it weighed and settle for only the fair price. Check for cracks or scratches in the jewelry thoroughly.
It is also important to be aware of the bullion prices to arrive at the correct price of your jewelry. Before buying or selling your gold, make sure to compare the gold prices as well as the making charges of different shops before you finally decide to go for one shop.
If you are going for a studded piece of jewelry, always ask for the breakup of the gold and the stones inside the jewelry piece.