Gold Rush
With gold prices at a 27-year high, investors and ordinary folk are cashing in on their bling
By Mavis Toh & Debbie Yong
Source:
http://www.straitstimes.com/Free/Sto...ry_162744.html
THESE days, lawyer C. C. Lie is sitting pretty on a pile of gold coins.
Last December, she had bought about $50,000 worth of one-ounce gold coins at US$650 (S$965) per ounce. With the price of gold breaching the US$750 per troy ounce (31.1g) mark on Friday, she is looking at a gain of about $5,000.
'I'm very happy with the returns and there's little risk involved,' said the 38-year-old mother of four. She had bought the gold coins as 'a form of wealth preservation'. She thinks that the price of gold will rise further and wants to buy more gold coins.
'If cash turns useless one day, at least I still have my gold,' said Ms Lie, who stores her coins in a bank vault.
At the other end of the scale, duty officer Devadas P., 52, pawned his wife's gold chain for $300 this week. The chain would have fetched him about $270 this time last year.
'The high gold price now is good because I need the money to tide over an emergency,' said Mr P. outside a pawnshop in Ang Mo Kio. He said that he would redeem his wife's chain when he receives his salary next month.
The rise in the price of gold over the past months has benefited investors such as Ms Lie and ordinary folk such as Mr P.
Since the start of this year, the price has gone up from US$630 an ounce to US$752.80 an ounce on Friday, the highest price since January 1980. Although the price is a 27-year high, analysts are talking of new record highs in the coming months.
DBS Bank's managing director of commodities and bank notes John Chan said the recent US Federal Reserve interest rate cut, high oil prices and global economic growth could help push the price past the US$1,000 mark.
Pawnbrokers interviewed said business has gone up because customers can get a better price for their gold jewellery. There have also been cases of customers who redeem their articles so that they can re-pawn their stuff to enjoy the high gold rate.
Managing director Yeow Shang Ying of Heng Leong Pawnshop at Indus Road said the number of customers has increased by 20 per cent. 'When the price is up, people let go of their gold because they get more for what they pawn,' said Mr Yeow.
Goldsmiths said that while the high prices have scared off buyers, regular customers are taking advantage of high gold prices to sell or trade their old gold jewellery for new ones.
In Bukit Batok, Ho Bee Goldsmith and Jewellery has seen a 30-per-cent increase in such customers. Director Tan Kim Lian said: 'They take this chance to upgrade their gold jewellery or perhaps cash in those they don't wear anymore.'
At the goldsmith shops, pure gold jewellery was priced at $43 per gram, up from $34 per gram last year.
Housewife Emerald Lee, 44, was spotted at Golden Landmark Shopping Complex after selling three gold rings and two bracelets for a $100 profit.
She said that she has sold almost 100 pieces of her gold jewellery this year. She declined to reveal how much she has made from her sale. But she let on that she made $600 last week from selling a gold bracelet which she had bought just last month.
'I sell when the price is good. Now I only have some pieces which I want to keep for my future daughter-in-law,' said the mother of a teenage son.
Four years ago, retailer Chris Tan invested half his life savings in gold bars and coins when the price was US$425 per ounce. He declined to reveal how much he spent but said that he has made a 'substantial profit'.
The 30-year-old confessed that he could not stop smiling when the price hit US$700 two weeks ago. He does not intend to sell his gold stash as he thinks that the price will rise.
Housewife Y.C. Tay, 60, is rueing that she sold off 2kg of her gold bars too early. She sold them in January when the price of gold was around the US$600 mark.
Although she made $10,000, she calculated that if she had waited till last week, she would have made $3,000 more.
'I sold it because I couldn't take the stress. My heart dipped and soared with the gold prices,' said Madam Tay.
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