Still not too late to buy gold, say jewellers

PETALING JAYA: The price of gold may be soaring but jewellers believe that it is the right time to buy the commodity before it goes up further.

According to them, this is due to the current geopolitical landscape in view of the trade war between the United States and China.

SMS Deen Jewellers group of companies chief executive officer Mohamad Shaifudeen Mohamed Sirajudeen said the commodities market faced abnormalities and uncertainties due to the geopolitical situation.

A few months ago, the retail price of gold was about RM180 per gramme but over the past two months, the selling price of 916 gold is around RM209 per gramme.

“Unlike other items that you buy like watches or cars, depending on the brand, the odds are that they lose their value rather quickly.

“But for gold, it’s hedging onto something so the prices are likely to go up.

“In the 1980s, gold used to be RM30 per gramme. Now, it’s over RM200. So in a way, it is a safe instrument if you want to buy it as an investment tool, ” he said.Mohamad Shaifudeen said the surge in gold prices caused fear among customers who preferred stability in the commodity.

However, it has not stopped shoppers who want the precious metal as a form of adornment. Some are even using the opportunity to trade in their old ones for newer designs.

“But when the price is stable and it stays there, people will get used to it.

“About 45 days ago, the price of gold was RM179 per gramme; overnight, it went up to RM184, then to RM189 and now it has skyrocketed.

“Malaysia is an emerging market so anything that happens across China and the US, we can see the repercussions immediately, ” he said.

Habib Jewels Sdn Bhd executive chairman Datuk Seri Meer Sadik Habib said despite the prices of gold going up steadily, the purchase of it was still strong in the Malaysian context.

In April, it was US$1,300 (RM5,492) per ounce and now it is above US$1,500 (RM6,337) per ounce.

“Purely on the investment side, we find that there is a strong transaction going on. Some purchased it when it was slightly more than US$1,200 (RM5,069) per ounce and now they are coming to resell as they feel it’s the beginning of a growth in gold prices.

“Some people feel that with the price hike, it is good to trade in and buy new jewellery while some just buy because they believe the price will continue to go up.

“As for the long term, gold seems bullish at the moment. It is still a strong investment tool, ” he said.

Tomei Consolidated Bhd group managing director Datuk Ng Yih Pyng said the reaction was mixed as the prices of gold increased substantially over the past two months.

The group, he said, had seen a surge in customers selling back their jewellery to them.

This meant that many customers made profits from their investment of gold wafers and bullion, he said.

“However, I expect this trend to diminish as gold price has turned to a bullish outlook, which means that when they see the prices continuing to go up, they may feel that it could be too early to sell so they will keep it, ” said Ng, who is also adviser to Federation of Goldsmith and Jeweller Associations.

Ng also noticed that customers would still buy gold for special occasions such as weddings or as gifts to avoid paying higher prices down the road.

Freelance financial planner Faiz Wahab believes that some buyers could be buying gold now to create a demand, so that the price would be driven even higher.

However, he advised against doing so.

“This is actually not a good move because gold investing is something for long term. People should wait for the right time (when the prices drop) and not rush into it, ” he said.

Source: TheStar