PUBLIC Gold Marketing Sdn Bhd expects gold investment returns to grow by a double-digit percentage this year.
Executive chairman Datuk Louis Ng said gold prices had remained stable for the past three months, hovering at around US$1,700 (RM5,161.62) per ounce, compared to the US$1,920 (RM5,829.60) peak in September 2011.
Presently, gold is priced at US$1,680 (RM5,100.90) per ounce, compared to US$1,655 (RM5,025) per ounce in late December 2012.
“This stability in gold prices has seen renewed interest in gold investment.
“We believe that the interest will continue, raising gold prices, and investment returns,” he said.
After gold prices peaked in September 2011, there was a lot of selling back in the gold market, which led prices to plunge, reaching US$1,520 (RM4,615.10) per ounce in December 2011.
“As a result, investment returns for 2012 were around 6%, which was the lowest since 2001.
“Between 2001 and 2011, gold investment returns averaged about 18% to 25% per year,” he said.
Ng added that the worsening global economy and the effects of quantitative easing measures to create more money supply in the US, Europe, and Japan would increase the appeal of gold investment as a hedge against inflation.
“The main effect of quantitative easing measures is inflation, which increases the appeal of investing in gold,” he said.
On Public Gold’s listing in Bank Negara’s Consumer Alert List last year, Ng said the company’s name was removed on Oct 29, 2012.
Public Gold was put on the Consumer Alert List on Sept 21, 2012.
“We were removed after Bank Negara completed an in-depth assessment on our company’s business model,” Ng said.
Public Gold differs from other gold investment schemes, as it does not promise monthly returns.
“We sell at 5% to 7% above the market price and there is no contract.
“We also ensure that the spread between the buying and selling price for customers is maintained at 5%.
“This means that if you buy a 100g gold bar at RM100, and if the price of gold rises to RM200, we will buy the gold bar back at RM190.
“If you were to sell the gold to a jewellery shop, the buy and sell spread is at least 20%. This is what makes us unique,” he said.
Ng said Public Gold model was very transparent, as it sells gold and silver bars based on 24-hour live international gold trading prices.
Ng explained that gold investment companies operating on Ponzi schemes sell their gold products at 30% above the market price.
“These companies also ensure monthly returns of 2% to 3%.
“The returns could go up to 5% and 7%, if the customer chooses not to hold the gold in hand.
“The buy-back price is not based on international market price but on a contractual price, which is valid for a three- to six-month period,” Ng said.
Moving ahead, Public Gold plans to release new gold bars in the second half of 2013.
“We are now designing the Bunga Mas gold bars that come in 10g, 20g, 50g and 100g weights.
“We have also introduced the Tai Fook gold bars and the Royal Collection dinars which are doing very well currently.
“Public Gold also recently sold 1,000 gold souvenir pins for a major Vietnamese bank at a value of RM3mil,” he said.
In Singapore, Public Gold will begin operations after it has obtained a goods service tax waiver for its gold products.
“In Singapore, only gold products with London Bullion Market Association (LBMA) certification are exempted from the goods service tax.
“To compete better in Singapore, we need to get the waiver from the authorities,” he said.
Public Gold is targeting to achieve an RM600mil revenue this year, compared to RM500mil in 2012.