Gold Investment: Guide to Investing in Gold in Malaysia

Gold is an excellent choice of investment for many reasons. It can be used as a hedge against inflation, and it will always be of value due to scarcity. As an alternative investment, it is a great portfolio diversifier for seasoned investors. Investors can diversify their portfolio by investing in gold, in addition to other investments in equity, fixed income and unit trusts.

So, what are the types of gold you can invest in as a beginner? 

As currencies fluctuate in value and gold becomes more scarce, the value of gold may increase in the future. If you’re looking to invest in gold for the long-term, you can invest in both physical gold and funds that invest in physical gold, because their values move closely with the price of gold.

However, there are some cons to keeping physical gold for the long term. Because you’ll need to keep it somewhere safe, physical gold may be expensive to store. It may also take time to liquidate the gold investment into cash, and gold does not generate any interest or dividends.

One easy way to invest in gold is through CIMB's e-Gold Investment Account (eGIA). This online account allows you to invest in gold with 99.9% purity – but unlike with physical gold, you don’t have to spend on storage or security. You can easily buy and sell gold through CIMB Clicks, so you’ll enjoy better liquidity. With a minimum initial purchase as low as 1 gram of gold, e-Gold Investment Account is an attractive platform for those new to gold investment.

If you’re still reading this, chances are you’re interested in investing in gold. Even for beginners, buying and selling gold is easy, convenient and safe. There are also a several types of gold you can start your gold investment journey with – including our e-Gold Investment Account (eGIA), physical gold and gold-backed exchange-traded funds (ETF).

Before you start buying gold, it’s important to consider what you want to achieve with your investment, so you can choose the right type of gold for your investment strategy.

Gold-related investments – which include stocks in gold-mining companies as well as gold-backed ETFs, mutual funds, futures and options – allow you to easily trade and capitalise on any short-term changes in the gold market. Futures and options carry a higher risk, but ETFs and mutual funds provide a lower-cost way to enter the gold market, and help you diversify your investment to lower your risk.

Some ETFs and mutual funds may invest in gold-mining stocks. For these funds, it’s important to keep in mind that the value of gold-mining stocks are not just tied to gold prices. Since you’ll be investing in gold-mining companies, your investment can also be affected by the companies’ expenses and performance.

Other ETFs and mutual funds invest in physical gold. One gold-backed ETF available in Malaysia is the TradePlus Shariah Gold Tracker, which has a YTD return of 21.91% as of 31 October 2020. 

To start trading, you’ll need to sign up with a trading account. Bear in mind that you would need to pay a broker fee, and that your investments will be affected by market risks other than gold prices and USD exchange rates.

To achieve this, you may want to invest the traditional way – with physical gold. Physical gold stores its value in the form of an object you can touch and hold, just like the cash in your wallet. Physical gold can also be used to hedge against inflation, or as a counterweight to the stock market.

But much like other investments – such as stocks, ETFs and foreign currencies – there is always risk and fluctuating prices if a downturn happens in the economy. So always keep an eye on gold prices before you decide to sell your physical gold.  

Physical gold is readily available and can be purchased at jewellery stores. You can choose your desired golden nuggets in the form of gold coins or gold bullion bars. However, gold bars are generally priced lower than gold coins, as coins tend to be embedded with intricate designs that charge a higher premium.

Gold is an investment choice that would suit almost any investor’s portfolio. Take a step forward and don’t be afraid to explore the different methods of investing in gold. Make sure to educate yourself so that you are fully prepared before investing in that first golden bar. Do check out our e-Gold Investment Account (eGIA) for updates and more info on investing in gold. 

This article is for informational purposes only and CIMB does not make any representation and warranty as to the accuracy, completeness and fairness of any information contained in this article. As this article is general in nature, it is not intended to address the circumstances of any particular individual or entity. You are advised to consult a financial advisor or investment professional before making any decisions based on the information contained in this article. CIMB assumes no liability for any consequences arising from your reliance on the information presented here.