With the softening of gold prices since early this year, it could trigger an increase of sales among gold products in the market. This is because people are more susceptible to purchase the precious metals as they may find the prices more alluring during times like that. Even if gold prices were to drop, they will increase gradually and unlikely to cause havoc selling.
The price of gold per ounce now hovers at US$1,630, compared to US$1,740 in January 2012, and US$1,800 in November 2011.
Since January 2012, due to the rise in demand for gold products, Public Gold has been producing about RM20mil worth of gold dinars, gold coins, and gold commemorative items, compared to a monthly average of RM12mil, for 2011.
Hence, the achievement of Public Gold through its extraordinary business model so far is permissible to a marginal spread of about 5%, which is similar to the spread for unit trust products. According to Public Gold Executive Chairman, Dato’ Louis Ng, “The company usually marks up the gold products by approximately 6% above the market price, while the spread or the loss sustained by the customers is only about 5% when the company buys back the gold.”
“The 6% marked up on the selling price and the 5% spread is very minimal, so we are able to get many customers to invest in Public Gold products,” Ng added.
Apart from that, Dato Louis Ng could foresee a return to the Gold Standard in the future which will guide the use of financial instruments. When that phenomena occurs, gold will be capable to generate interests similar to how paper currency is currently doing.