Gold and Silver and the China Factor

Post by **Dennis Ng** » Mon Mar 01, 2010 9:11 am

one of the risks faced by the world is rising inflation in the next few years. When inflation rises, Real Assets, including Gold and Silver would do well.

Another factors missed by most analysts is the "China Factor". China is starting to move its foreign reserves into commodities, including Silver and Gold. Among the 10 biggest countries in the world, China holds the least in Gold, only about 1.5%, compared to over 5% for most of these top 10 countries.

So let me ask you, is China likely to buy or sell Gold and Silver in the next few years? And if China starts buying, becos of the sheer size of the reserves (total US$3 trillion), they will be buying in billions....

I just read page 26 "The Edge" dated 28 Feb 2010 on ""Tales of the Shanghai market. . It said that china sold some US$34.2billion of Treasuries in Dec 09 and is likely to use part of the money to buy into Silver.

I suggest people to buy some Gold and Silver as a hedge against inflation, it is like having insurance, should inflation strikes, Gold and Silver prices would shoot up like crazy. Gold might move up to US$1,500 to US$2,000. What about Silver? Silver's historical high price was US$50 in 1980, now only US$16. Between the 2, it appears that Silver is more under-priced.

My gold and silver investments is about 7% of my investment portfolio. Have you invested any of your money into Gold and Silver?

andysgp · Post by **andysgp** » Mon Mar 01, 2010 11:34 am

Hi Dennis,

How do we invest in gold and silver?

Thanks.

ederxu · Post by **ederxu** » Mon Mar 01, 2010 12:26 pm

i believe one of the way is to buy ETF. Gold ETF is avail in Singapore Exchange. but Silver will have to look at the US Exchange.

star88 · Post by **star88** » Mon Mar 01, 2010 3:22 pm

I prefer invest in physical gold, example Gold Bar and Gold Jewellery.

ahvyee · Post by **ahvyee** » Mon Mar 01, 2010 3:27 pm

For silver, you can open UOB silver savings account. For more information, you can check this website.

http://www.uob.com.sg/corporate/corpora ... etals.html

insecure · Post by **insecure** » Mon Mar 01, 2010 5:23 pm

Is there any Sliver ETF listed in SGX? Sliver is undervalued now.

ederxu · Post by **ederxu** » Tue Mar 02, 2010 3:08 am

insecure wrote:Is there any Sliver ETF listed in SGX? Sliver is undervalued now.

Nope, SGX does not have silver ETF..

Post by **Dennis Ng** » Tue Mar 02, 2010 9:12 am

andysgp wrote:Hi Dennis,

How do we invest in gold and silver?

Thanks.

Various ways:
1. buy physical Gold/Silver. (Storage problems/risks).
2. open UOB Silver or Gold Saving account (I have Silver Savings Account)
3. Streektracks Gold ETF (I invest in Gold ETF
4. buy gold or silver mining stocks (price may go down even when Gold/Silver price goes up if company in financial trouble.

Post by **Dennis Ng** » Tue Mar 02, 2010 9:13 am

ederxu wrote:
insecure wrote:Is there any Sliver ETF listed in SGX? Sliver is undervalued now.
Nope, SGX does not have silver ETF..

yup, if want, can buy ishares Silver ETF listed in U.S. can buy through stock broking firm in Singapore. For me, I simply open a UOB Silver Savings account.

walkinepark · Post by **walkinepark** » Tue Mar 02, 2010 4:56 pm

Hi Dennis,

Just like to understanding the risks of buying Gold and Silver.
What will cause them to drop in value?

My last check was that StreetTrack Gold ETF is now called SPDR Gold, valued at around US$109.46.. going up to US$1500 is quite a big jump..

wemakebread · Post by **wemakebread** » Wed Mar 03, 2010 12:22 am

Hi walkinepark,

Allow me to share a few thoughts.

I think the greatest risk is from speculators.
Around 11 Jan 2010, gold peaked at 1224.80 and silver peaked at 19.42

Gold dropped to as low as 1074 & is now at 1130.
Silver dropped to as low as 14.63 & is now at 16.77.

Speculators can help to bring the price up by creating buying interest.
But once they start massive sell off to take profit, price will fall sharply.
I believe this was what happened in Jan this year.

Besides speculative activity, the price of commodities should be largely driven by market forces of supply vs demand. For prices to fall drastically, there needs to be huge over-supply or sudden dip in demand.

I personally can't foresee any scenarios where this will happen.
On the contrary, there has been recent news that IMF intends to sell 190 tonnes of gold to China. If this happens, there will be lesser supply in open market & price may tend to go higher.

Overall, I think prices now are still good for buy.
Unfortunately, it has just gone up as I write this.
If you are conservative, I would suggest to wait for price to come down a little. Maybe Gold < 1110 & Silver < 16, although I am also not confident that it will indeed drop back to those prices or lower. The uptrend seems to be gathering momentum.

If you are using these as hedge against serious inflation, it may not make much difference, because prices will shoot up drastically in that scenario.

r8n2 · Post by **r8n2** » Wed Mar 03, 2010 9:24 pm

Hi all, I just learned that one can buy physical Gold here in Singapore, hold it for 6 moths and then sell it back at the same price while receiving significant interest for the money to the gold trader for the six months you hold the gold bar as collateral. Did any one of you hear something similar so far? Any experience to share good or bad?

Post by **Dennis Ng** » Thu Mar 04, 2010 10:24 am

r8n2 wrote:Hi all, I just learned that one can buy physical Gold here in Singapore, hold it for 6 moths and then sell it back at the same price while receiving significant interest for the money to the gold trader for the six months you hold the gold bar as collateral. Did any one of you hear something similar so far? Any experience to share good or bad?

My understanding is as follows:

You buy Gold priced 25% higher. 6 months later they give you 9%. This scheme can be subjected to abuse by the company. When price of Gold falls, the company can just walk away and you are left holding the Gold...

Something that people don't know is whoever holds the Gold is actually safeguarding the Gold, so you're effectively safeguarding the Gold for them FREE (since you didn't charge them).

r8n2 · Post by **r8n2** » Thu Mar 04, 2010 1:08 pm

Thank you Dennis for your comments.
I am aware of the risk of 25 % but if I hold the gold for 3x6 months I have recovered from the risk and can hold on for a nice passive income.
If I understand you right you think that the company might not stick to their promise to buy back the Gold at the formerly fixed price but just close shop?Is there any safeguard against this in your opinion? Other then not doing the deal?
Thanks for your patience

wemakebread · Post by **wemakebread** » Thu Mar 04, 2010 7:49 pm

Hi r8n2,

I posted similar topic. May be useful to you.
http://www.masteryourfinance.com/forum/ ... php?t=1090
In that post, you will find links to 2 other forums that discusses this topic.
Happy reading ... hope you don't feel overloaded with information.

There is also another post on investment scams here, for reference.
http://www.masteryourfinance.com/forum/ ... php?t=1163

For those who like Silver,
http://www.masteryourfinance.com/forum/ ... .php?t=986

And if you prefer Gold instead,
http://www.masteryourfinance.com/forum/ ... .php?t=944

Or if you like to know more about Streetrack Gold ETF http://www.masteryourfinance.com/forum/ ... .php?t=992

Cheers!

www.masteryourfinance.com FORUM

Gold and Silver and the China Factor

Gold and Silver and the China Factor

physical gold w/ interest?

Re: physical gold w/ interest?