An Opportunity to Invest in Gold

For months now I've been wanting to invest in gold. Since end of last year, analysts have highlighted the prospects of gold and there are many forecasts about how high the price of gold will escalate to in 2009 itself.

I've enquired from banks and goldsmiths about the price of gold coins. It's not that cheap so though I am an interested investor, I hesitated. The resale value should be a lot higher if I were to sell it back into the market in the future but I can't be sure if they would fetch the returns I expect. So I sit and wait and continue to ponder if I should actually buy the physical gold or search for other alternatives.

You can't imagine my excitement when I came across an advertisement in the papers yesterday from Public Bank. The bank is now offering a Gold Investment Account which allows the investor to buy and sell gold without having to keep the physical gold. How it works is that you put in an order to buy the gold by grams at the prevailing selling rate of the bank. You will be given a passbook that captures your every order. When you want to sell it, you can do so at the prevailing buying rate and you get your cash back. Alternatively, you can also request to have the physical gold when you sell, but there are additional charges involved in insurance, etc.

But you have to bear in mind that this investment account does not pay interest during your holding period. You make your returns merely by trading gold with the bank. If the price of gold rises as it is expected to, then this is a good long term investment to get into. You just need to be careful that you take into account the spread of the buying and selling rates so that you do not sell out at a losing rate.