Dividen ASB 2011 7.65 sen dan Bonus 1.15 sen

Tahun 2011, ASNB mengumumkan dividen ASB meningkat sedikit iaitu 7.65 sen dan bonus 1.15 sen.

Petikan penuh Berita Harian Online:

KUALA LUMPUR: Pemegang unit Amanah Saham Bumiputera (ASB) akan menerima dividen sebanyak 7.65 sen seunit dan bonus 1.15 sen seunit bagi tahun kewangan berakhir 31 Disember 2011.

Agihan pendapatan itu meningkat 0.15 sen seunit berbanding agihan yang dibayar tahun lalu iaitu 7.50 sen seunit.

Pengerusi Permodalan Nasional Berhad (PNB), Tun Ahmad Sarji Abdul Hamid, berkata pengagihan pendapatan itu membabitkan pembayaran sebanyak RM7.04 bilion, meningkat 21 peratus berbanding RM5.82 bilion tahun lalu manakala peruntukan bagi pembayaran bonus pula sebanyak RM628.29 juta.

Pembayaran pengagihan pendapatan dan bonus ASB akan dikreditkan secara automatik ke dalam buku pelaburan pemegang unit yang boleh dikemaskini, mulai 3 Januari 2012.

Semua urus niaga ASB di ibu pejabat Amanah Saham Nasional Berhad (ASNB), pejabat dan ejen ASNB di seluruh negara akan ditangguhkan mulai 21 Disember sehingga 2 Januari depan.

“Prestasi ASB sepanjang 2011 adalah memuaskan meskipun pada suku terakhir, pasaran saham didagangkan dalam suasana tidak menentu dipengaruhi prestasi pasaran global yang terjejas berikutan ketidaktentuan ekonomi Amerika Syarikat (AS) dan krisis hutang Eropah,” katanya pada sidang media mengumumkan agihan pendapatan ASB, di sini, semalam.

Hadir sama Presiden dan Ketua Eksekutif Kumpulan PNB, Tan Sri Hamad Kama Piah Che Othman. 
Ahmad Sarji berkata, sehingga 15 Disember 2011, tabung ASB memperoleh pendapatan kasar RM7.19 bilion, di mana pendapatan dividen daripada pelaburan dalam syarikat menyumbang sebanyak RM4.09 bilion, keuntungan daripada penjualan saham dalam syarikat menyumbang RM2.25 bilion dan RM0.85 bilion disumbangkan pendapatan pelaburan dalam instrumen jangka pendek dan lain pendapatan.

Beliau berkata, pengiraan pengagihan dan pendapatan itu berdasarkan purata baki pegangan minimum bulanan bagi tempoh pelaburan sepanjang tahun kewangan 2011, manakala pengiraan bonus pula berdasarkan purata baki pegangan minimum bulanan 10 tahun bermula dari 2002 hingga 2011.

Katanya, kadar pengagihan pendapatan dan bonus tabung ASB itu adalah kompetitif dibandingkan dengan instrumen pelaburan lain yang sesuai dijadikan perbandingan.

Sementara itu, Hamad Kama Piah, berkata pihaknya menerima sambutan yang menggalakkan daripada pemegang unit ASB untuk meningkatkan jumlah pelaburan masing-masing.

Beliau berkata, tahun ini penambahan dalam skim ASB melebihi RM13 bilion berbanding RM12.1 bilion tahun lalu.

“Peningkatan jumlah penambahan pelaburan dalam ASB ini menunjukkan pelabur percaya dan yakin dengan prestasi yang dicatatkan skim ini,” katanya.

Prestasi MAAKL Syariah Index sehingga November 2011

Tidak banyak perubahan berlaku pada bulan November untuk dana Syariah Index, w/pun ia kembali selepas jatuh teruk pada bulan September. Pergerakan harga di pasaran saham bergerak pada julat yang agak sempit.

Prestasi MAAKL Syariah Index sehingga Oktober 2011

Bulan Oktober ini menyaksikan dana MAAKL Syariah Index telah kembali pulih. Pelabur yang ada membeli unit pada harga terendah pada penghujung bulan September pasti telah mendapat pulangan yang lumayan, kerana harga seunit Syariah Index telah naik melebihi 10%.

Prestasi MAAKL Syariah Index sehingga Oktober 2011

Bulan Oktober ini menyaksikan dana MAAKL Syariah Index telah kembali pulih. Pelabur yang ada membeli unit pada harga terendah pada penghujung bulan September pasti telah mendapat pulangan yang lumayan, kerana harga seunit Syariah Index telah naik melebihi 10%.

Prestasi MAAKL Syariah Index sehingga Sep 2011

Bulan September 2011 menyaksikan pasaran saham menjunam teruk. Tidak ada yang terkecuali termasuklah Bursa Malaysia. Ia menyaksikan nilai dana ekuiti Syariah Index jatuh sebanyak -8.48%, walaupun ia lebih baik berbanding indeks KLCI yang jatuh lebih teruk iaitu -10.56%.

Dividen ASW2020 2011 6.5 sen

ASNB mengumumkan pengagihan pendapatan 6.5 sen seunit untuk Amanah Saham Wawasan 2020 (ASW2020) bagi tahun kewangan berakhir 31 Ogos, 2011. Ini merupakan kenaikan 0.15 sen seunit berbanding pengagihan pendapatan 6.35 sen seunit tahun lalu. Pengagihan pendapatan tersebut membabitkan pembayaran berjumlah RM909.05 juta, iaitu peningkatan 17.72 peratus berbanding jumlah pembayaran RM772.19 juta pada tahun sebelumnya.

Sehingga 15 Ogos 2011, ASW 2020 telah memperolehi pendapatan kasar berjumlah RM1.158 bilion.Pengiraan pengagihan pendapatan adalah berdasarkan kepada purata baki pegangan minima bulanan bagi tempoh pelaburan sepanjang tahun kewangan ASW 2020, iaitu mulai 1 September, 2010 sehingga 31 Ogos 2011.Pengagihan pendapatan akan mula dikreditkan secara automatik ke dalam buku pelaburan pemegang unit pada 1 September tahun ini.

Prestasi PIEF 6 Bulan 2011 4.98%

Dana PIEF memberi pulangan sebanyak 4.98% untuk tempoh 6 bulan pertama 2011.

Prestasi Ittikal 6 Bulan 2011 5.52%

Dana Public Ittikal memberi pulangan sebanyak 5.52% untuk tempoh 6 bulan pertama 2011.

Prestasi PBIEF 6 Bulan 2011 5.55%

Prestasi PBIEF untuk setengah tahun (6 bulan) 2011 cemerlang dengan pulangan sebanyak 5.5%.

Prestasi PISEF 6 Bulan 8.61%

Dana Public Islamic Select Enterprises Fund (PISEF) memberi pulangan sebanyak 8.61% untuk tempoh 6 bulan 2011, iaitu 3 Jan 2011 hingga 30 Jun 2011. Suatu prestasi yg agak cemerlang, memandangkan situasi pasaran saham yg sangat volatile utk separuh tahun 2011 ini.

Don’t leave your family or children crying over your money?

If you look at the news head line of Sunday Times recently, it said that “RM40 billion unclaimed cash and assets left by the dead”. To all, it is just a whopping figure. However to the families and children concerned, it is the much needed money they need to support the family and their children’s education. They have been struggling for years to get the money from the authority and many of them still unable to acquire their fair shares. All these are attributed to the fact that most of their family members die without leaving a will.

Though the deceased may have left lots of cash and property, the family members can not get their hands on them if there is no will.

Do You Still Think Will Writing Only for Rich People ?

 

The Answer: You should not be by now !

 

Many people have the perception that I do not need a will, I have no asset – the Will is only for Rich People with lots of assets. This is not true. Will is for everyone – especially for those who love and care for their loved one.

When a person makes a will, it allows the testator (will maker) to distribute the estate according to the person’s wishes. It will reduce the likelihood of a prolonged estate administration case because if a person died intestate (without a will) the process of getting the courts to provide a Letter of Administration could take years, averagely about 5 years. Besides, with a valid will, it helps to prevent family disputes over rights of ownership to the estate, and allows for the appointment of guardians of our own choice for our minor children.

 

We have been working hard to build up our wealth so that we could provide a good living for our loved one. While we have been putting the investment and protection puzzles into it places, we can not left out the last piece of the financial planning puzzle – Wealth Distribution – Wills & Trust.

Do not procrastinate, start off with a simple will to ensure our hard earned investments are well taken care off.

Where to Invest: Gold or CPO?

Two commodities is currently the world’s interest, particularly crude palm oil and gold. Globe gold price is presently in the degree of U.S. $ 1,372 per troy ounce.



This value boost occurred about 30 percent within the previous yr. “Analysts estimate the price of gold might be the selection of U.S. $ one,450 per troy ounce, until the end of this yr,” Data U.S. Geological Survey (USGS), shows that gold manufacturing rose two.26 tons to 2350 tons in 2009. This creation, nine.six % beneath its peak in 2001.

Thomas Chaize, observers of gold as  GoldSeek.com, observed that the decline in production has created the cost of gold soared. Inside a decade, gold prices rose from U.S. $ 275 troy ounces (one troy ounce equals 31.one grams) to more than U.S. $ 1,300 this month.

Meanwhile, planet crude palm oil costs now reaching the degree of U.S. $ 890 per ton. “Until the end in the yr, the price is going to be the variety U.S. $ 900-950 per tonne,” said Nico Omer Jonckheere, vice president of PT Valbury Asia Securities in Jakarta.

Which is, there is an boost of about 40.eleven percent in comparison with the typical CPO value inside the final yr (2009), namely at the level of U.S. $ 678 per ton. That worth is much higher than expectations of Indonesian Palm Oil Association (Gapki), which predicts only an enhance of 12 %.

The cost enhance can also be due to the imbalance amongst need and availability of merchandise with the CPO.

So it is as much as you pick which one? Gold Or CPO.

Gold vs Silver

NEW YORK (TheStreet) -- One question which I am asked regularly is how do investors decide how much of their precious metals dollars do they invest in gold bullion, and how much in silver? In other words, they are looking for a "ratio" to guide them. In fact, I will argue that there is an existing, visible ratio which provides investors with good guidance on allocating those investor dollars.

The gold/silver price ratio is a simple comparison of the price of silver vs. the price of gold. With these two commodities having played a vital role in human commerce (and human culture) for thousands of years, the gold/silver price ratio is arguably our oldest "economic statistic". For most of the last 5,000 years it has averaged approximately 15:1 -- until this century, when a combination of developments skewed this ratio to its most extreme imbalance in 5,000 years. 

There are many ways to demonstrate that the current price ratio -- of well over 60:1 -- is both unjustified and unsustainable. The starting point is to observe that the element of silver is roughly 17 times more plentiful in the earth's crust than the element of gold. Indeed, what is strange is that our much more primitive ancestors (who had no way of analyzing the composition of the earth's crust) did a much better job of pricing these metals appropriately than their modern descendants. 


The result of well over half a century of grossly distorting the price of silver, both in absolute terms and versus the price of gold has clearly set up this market for a spectacular default -- at which time the market will "correct" the price imbalance, in the most brutal manner possible. The evidence of this upcoming event is all around us, much of it compiled by the years of painstaking research by Ted Butler, the "dean" of silver commentators.


It is Mr. Butler who has chronicled the extreme-and-absurd manipulation of the silver market through the criminal activities of the bullion-banks in futures markets -- and mostly from New York's Comex exchange. As most of us know, identical activities have been taking place in the gold market, with GATA taking the lead in exposing that aspect of market-fraud.

The Kijang Emas Gold Bullion Coins

Malaysia is the 12th country in the world to issue its own gold bullion coin. The Kijang Emas now joins the ranks of other international gold bullion coins.

The design of the obverse of the Kijang Emas depicts a barking deer ("kijang") in its natural habitat in the Malaysian jungle. The reverse side features the hibiscus, the national flower of Malaysia.

1 Troy ounce

Face value: RM200 Gold Purity: 99.99% Standard weight: 31.105g Diameter: 37.00 mm

1/2 Troy ounces	1/4 Troy ounces
Face value: RM100 Gold Purity: 99.99% Standard weight: 15.550g Diameter: 28.00 mm	Face value: RM50 Gold Purity: 99.99% Standard weight: 7.780g Diameter: 22.00 mm

The purchase and reselling price of Kijang Emas is determined by the prevailing international gold market price. The daily market price is posted on the BNM web site.

The Kijang Emas is minted by the Royal Mint of Malaysia and distributed by Maybank Berhad, which will also entertain further enquiries.

PLATINUM: THE RICH MAN'S GOLD

WHY IS PLATINUM SO PRECIOUS AND CONSIDERED THE RICH MAN'S GOLD?

It is simply a matter of relative scarcity. Per the Platinum Guild International, platinum is the "most precious" of the precious metals for the following reasons:

(1) The annual supply of platinum is only about 130 tons - which is equivalent to only 6% (by weight) of the total Western World's annual mine production of gold - and less than one percent of silver's yearly mine production. Another amazing platinum trivia is the fact that more than twice as much steel is poured in the U.S. in only one day than the total world's platinum production in one year - indeed scarce!

(2) Approximately 10 tons of ore must be mined - sometimes almost a mile underground at temperatures greater than 120 degrees Fahrenheit - to produce one pure ounce of the "so-called white gold." Furthermore, the total extraction process takes six long months.

(3) All the platinum ever mined throughout history would fill a basement of less than 25 cubic feet.

(4) Although its relative weight does not contribute to its value, platinum is even heavier than gold - one cubic foot weighs a little more than 1,330 pounds, about 11% denser than gold. THAT'S WELL MORE THAN HALF A TON. Expressing platinum's weight differently, a six-inch cube of the white metal weighs about as much as an average man!

(5) Relative to volume mined, platinum has many more industrial uses than either silver or gold. In fact more than 50% of the yearly production of platinum is consumed (read destroyed) by industrial uses - unlike gold!

(6) Also unlike gold, there are no large inventories of above-ground platinum. Therefore, any breakdown in the two major supply sources would catapult the price of platinum into orbit.

EXTREMELY LIMITED SOURCES OF SUPPLY

Unlike nearly all metals and crude oil which are found throughout the world, important platinum deposits are limited to basically two areas of the world. Naturally, platinum is produced as a by-product in several areas of the world, but this production source is very insignificant. Only South Africa and the CIS (formally known as the USSR) have been blessed with what might be termed deposits of "industrial quantities" of the "Rich Man's Gold." And South Africa is far and away the most important of the two as it accounts for approximately 80% of the total world's annual mine production - AND MUCH MORE IMPORTANTLY 88% OF THE WORLD RESERVES OF PLATINUM. An interesting aside is the fact that South Africa controls more platinum reserves than ALL THE ARAB NATIONS CONTROL CRUDE OIL RESERVES. I say approximately 80% of world production, because that estimate is the consensus of the various sources. The CIS accounts for about 10%, the remainder is scattered around the world. Therefore, it is readily obvious to all observers that any political instability and/or labor turmoil in South Africa - and to a lesser extent in the CIS - would have an absolutely draconian impact upon platinum prices. As I mentioned previously, a general strike in South Africa would cause gold to soar, but it would take Jean Luk Picard (Star-Trek) at Warp 9.9 to catch up with zooming platinum prices.

In light of the metal's EXTREME scarcity, it is NOT surprising that more than 90% of the world's platinum production comes from only four mines: three in South Africa and one in the CIS. South Africa's prodigious platinum production comes mainly from Rustenburg (RPATY), Impala (IMPAY) and Lonrho (LNROY). And nearly all the CIS production comes from the Norlisk mine in Siberia. Interestingly, Rustenburg and Impala market prices have risen this year, despite the declining trend of gold and silver stocks. Currently, Rustenburg is up 33%, and Impala up about 20% from their 1997 lows. That type of relative strength usually portends much greater appreciation, once the precious metals begin their bull move.

PLATINUM PRODUCERS OUTSIDE SOUTH AFRICA

About three years ago I did some research on platinum. I discovered that a number of publicly owned companies produced platinum as a by-product. An example is the giant nickel producer in Canada, INCO. However, the financial fly in the ointment is that INCO's income from platinum production gets lost in their income statement, in that it represents such a minuscule amount relative to their other production. In fact my research only turned up one pure platinum play outside of South Africa. It is Stillwater Mining (PGMS) of Montana. Until about 1995 it was totally owned by Chevron Resources and the Manville Corporation. For whatever reasons the two giant corporations sold it to the public at about $14 per share, after which it roared to almost $29, when it corrected to support in the $15 area. In recent weeks renewed mutual fund interest in the stock has trampolined the price to about $24.

To my knowledge it is the only pure platinum play not subject to possible political instability and/or labor strife. I would be grateful if readers of this report would share any current platinum research and opinions they may have. Some sources estimate that Stillwater Mining accounts for about 3% of the annual supply of platinum.
Apart from the platinum producers already mentioned, there is one potentially interesting platinum play located in Zimbabwe, Africa. It is an Australian gold, platinum and diamond producer called Delta Gold (DGD). During the last few years Delta Gold has been exploring properties with platinum potential in Zimbabwe via a joint-venture with BHP Minerals. Though modest, actual platinum production has already begun in the Hartley Platinum Complex in Zimbabwe.

WORLD CONSUMPTION OF PLATINUM

Although an exhaustive analysis of the supply/demand dynamics of the white metal is beyond the scope of this report, this researcher would be remiss NOT to make some mention in this respect. Platinum supply/demand dynamics are tight - and getting tighter every month. While the western world's industrial demand is understandably a function of economic growth - which obviously increases at a moderate rate - emerging countries demand for platinum is literally exploding. For example, China. It is a well-known statistic that the Sino-behemoth has enjoyed the highest percent of annual economic growth of any nation in the world during the last 10 years. And there doesn't seem to be any slowing forecasted in the foreseeable future. China's platinum consumption has grown apace with its annual industrial production increases. The reader must be aware we are talking a dynamic society of more than 1.2 billion strong population. China's future platinum demand ALONE will tax current production capacity of the four major mines.

Annual platinum consumption is divided into three categories: 50% industrial uses; 40% jewelry manufacturing and 10% for investment purposes. Inscrutably, the Japanese account for 95% of the platinum jewelry demand.

PLATINUM'S INVESTMENT PROSPECTS

Historically, platinum prices run in tandem with the precious metals group (gold, silver, platinum and palladium). However, there are a couple of distinguishing characteristics to the "Rich Man's Gold." Platinum usually leads the other metals in any valid new bull move - albeit accompanied by palladium. Additionally, platinum is much more volatile on the upside and downside than is gold. Whereas during normal periods of rising precious metals prices, platinum enjoys a few dollars premium over gold, the platinum/gold spread widens considerably when the group is in a strong bull posture. In fact the platinum/gold spread has reached more than $200 occasionally during the last two decades. No one can foresee the future, but in the next precious metals bull market, it may well repeat the performance.
Whether a person should take the bullion investment approach, or the shares of the three South African platinum mining companies, or the North-American stock, Stillwater Mining, or the Australian Delta Gold, or even platinum coins - is a personal decision dependent upon numerous factors, and one's tolerance for risk. Unfortunately, discussion of these factors is beyond the scope of this report. Nevertheless, this researcher believes all will do well, once the bull market in precious metals begins its cycle anew.

Gold vs Crude Oil

GOLD vs CRUDE OIL Oil producers normally find it in their best interest to add steadily to productive capacity. Gradual addition of capacity year after year keeps oil supply in rough equilibrium with demand as the global economy grows. Mild shortages and surpluses sometimes arise, but they are quickly addressed by market forces so long as monetary policy is anchored properly. It was really a monetary error that began throwing the oil market out of whack three years ago, one we wrote about at the time in forecasting a sharp decline in the price of oil. Specifically, it was the sharp deflation of the U.S. dollar which began in 1997-98. As the value of the dollar rose into deflationary territory -- as measured against gold, the best proxy for commodities, many countries were forced to break their dollar links and devalue their currencies. This triggered major global disruption, first in Asia and then in Latin America. 

As global economy slowed, oil demand plunged, leaving an excess of oil on the market, which caused oil to fall harder and faster than gold or the currencies tracing the dollar. As the oil price fell to $10/bbl in 1998/99, oil producers at the margin were driven out of business. Those that remained stopped investing in infrastructure and production. Once the world economy adjusted to the deflation, in 1999, global growth resumed. Governments in Asia and Latin American began to find the keys to growth, stabilizing their currencies and jettisoning some of the austere fiscal policies pressed upon them by the IMF and World Bank. The rebound in commerce quickly increased the need for oil. Demand began to exceed available inventories, pushing prices up and out of their traditional trading locus. Had oil producers at the margin not been totally destroyed by the 1997-98 commodity depression, no supply shortages would have emerged.

The oil price should come back down as high prices pull capital towards higher relative returns, which implies more production -- but the process will take a while. The 1997/98 oil price plunge had a searing effect on producers, who obviously do not want to be burned again, should another deflation be right around the corner. Oil producers may not have identified price swings as monetary deflation, but they certainly grasped the concept that committing to new fixed capacity is more risky in an environment where the nominal price is highly volatile. As long as the dollar is not fixed in terms of gold, its volatility will continue to throw off misleading signals of capital shortages and surpluses, inevitably leading to booms and busts. 

Gold and oil traditionally have had a 15-to-1 relationship, only slipping out of congruence for short periods of time. When the gold/dollar relationship is anchored, the oil/dollar relationship remains stable as well. (See the chart of oil pre 1970 – it barely budged for years at a time.) When the dollar/gold relationship is malfunctioning, as it is now, capital is wasted as producers try to protect themselves from the damaging impact of inflations and deflations, which ultimately weaken the entire pricing system. The upshot is that prices will eventually come down. But in the meantime, we’ll all be getting squeezed at the pumps. 

Dr. Jude Wanniski
19 June 2000

Reprint Permission courtesy of http://www.polyconomics.com
*******************************
Jude Wanniski, president of Polyconomics, Inc., Morristown, New Jersey, is one of the leading political economists in the United States. A prolific writer and profound thinker, it was Mr. Wanniski who, as Associate Editor of The Wall Street Journal from 1972 to 1978, repopularized the classical theories of supply-side economics. His book, The Way the World Works, published in 1978 to critical acclaim, and which brings a passion and eloquence to the supply-side model of political economy, became a foundation of the global economic transformation launched by the Administration of President Ronald Reagan.

Gold vs Dollar

Introduction

Gold has been a poor investment for many years. This is a statement which is almost universally accepted in today's world, but one which is only partially true. The truth is that gold has been a very poor investment when measured in US dollars, but has generally proven to be a sound investment when measured in terms of almost any other national currency. The Indians and the Chinese, the world's largest buyers of gold, have seen the value of their gold investments increase by approximately 200% over the last decade. Due to a collapse in their national currencies, South East Asians and Koreans have also seen the value of owning gold . 

The US dollar reached a cyclical low in April 1995, from which it has risen over 50% against the Yen and 30% against the Deutsche Mark . This means that German and Japanese investors who exchanged their national currency for gold in April 95 would now be showing a profit on their investment, despite a 21% decrease in the US dollar gold price over the same period.

What we have witnessed over the past 2.5 years is a massive shift of investment capital into the US dollar from all other currencies, including gold. Investors around the world have placed enormous faith in the US dollar and, therefore, in the US economic, financial and political system which supports the dollar. Gold has been a victim of this flight to the US dollar, although it has fared better than many of the government controlled forms of money.

With the US dollar continuing to strengthen as capital flees from EMU-generated uncertainty in Europe and debt-based currency crises throughout Asia, why should anyone invest in gold ? Why not just invest in US dollars and US dollar denominated assets ? In my opinion, there are only two reasons to invest in gold.

Reason # 1 To Own Gold

Many supporters of gold continue to put forward the argument that Central Banks are controlling the gold price. The reason for the popularity of this argument appears to be the misconception that the demand for gold exceeds the supply of gold. After all, if the demand for something does exceed its supply by a substantial amount and for a long time, and the price goes down, then it is logical to assume that there must be dark forces at work to manufacture this unreal situation. The problem is, whenever you start from an incorrect premise and then develop your arguments based on flawless logic, you must necessarily arrive at the wrong conclusion.

Perhaps it is hard for goldbugs to accept that gold is a genuinely unpopular investment at the moment when compared to the all-conquering US dollar. However, the fact is that net CB sales of gold over the past few years have been small. Gold loans by CBs have probably had some effect, but the over-riding factor is that private investment demand for gold has reached its lowest point since 1971. Until there is an increase in this demand then the above-ground stock of monetary gold, more than 60% of which is held in private hands, will be an available source of supply.

Just as it is wrong to think that the supposed annual deficit in gold supply (the difference between newly mined supply and commercial demand) will lead to a higher gold price, it is equally wrong to think that the above-ground stock held by the CBs is necessarily sufficient to meet demand for many years to come. Trillions of dollars of investment capital is moving around the world each day searching out stability or protection or investment returns.  

If confidence in financial assets and government controlled currencies was to significantly reduce, then the total gold reserves of all CBs (worth 320 billion dollars at current gold prices) could be absorbed in an instant by private investors.

Government controlled currencies are liabilities of the monetary agents and are backed by debt. Their value is hence based on the level of confidence in the financial and political systems and their rates of exchange tend to oscillate daily based on changes in this confidence level.  

For example, if doubt arises regarding the quality of the debt which provides the asset backing for a currency, then capital will shift from that currency into an alternative investment. Gold, a tangible asset which has been valued as a store of wealth for thousands of years, provides an ideal alternative.

Those who are advocating the CB conspiracy theories are failing to appreciate a very important point : The primary reason to own gold as an investment is because it is not controlled by central banks and governments.

Reason # 2 To Own Gold

The second reason to own gold is a corollary of the first. The debt which forms the asset backing of a national currency can be split into two groups - private debt and government debt. The quality of private debt will reduce if the cashflow of the borrowers is insufficient to meet the repayments and /or the value of the underlying security for the loan (real estate, shares, etc) becomes less than the amount of the loan. This is the situation which Japan has faced since 1990 (lending based on collateral rather than cashflow followed by a substantial reduction in asset values has resulted in huge, non-performing private debts). Large scale defaults on private debts will force asset sales, pushing down asset values even further, and stop new investment . Liquidity will thus be removed from the system and interest rates will fall to a point where investment once again becomes feasible. The process is self correcting unless, of course, the government tries to help.

A different set of rules, however, apply to government debt . These rules can begin to be understood by first reading the following explanation of central bank powers taken from a speech given by Alan Greenspan in January of this year :

"Central banks can issue currency, a non-interest-bearing claim on the government, effectively without limit. They can discount loans and other assets of banks or other private depository institutions, thereby converting potentially illiquid private assets into riskless claims on the government in the form of deposits at the central bank. That all of these claims on government are readily accepted reflects the fact that a government cannot become insolvent with respect to obligations in its own currency."

As Greenspan points out, a government can never run out of its own currency. Therefore, the cashflow of a government will never be insufficient to service its internal debt. It can simply create as much money as it needs through the issue of new debt. It should also be noted that governments never have to concern themselves with the value of the assets used as security against their loans, because there are none. The asset which backs all government debt is the full faith and credit of the government.

A problem for a country occurs when new money is created at a consistently greater rate than the increase in the supply of tangible assets, resulting in rising prices, reduced demand for financial assets, and increasing interest rates. This situation arises as greater and greater levels of debt are needed to sustain a stock market or real estate bubble, or to pay for government/business expansion, or simply to service the repayments on existing debt (both private and government).

Throughout history people have accumulated precious metals to defend their wealth from destruction as every form of paper currency ever created has been devalued through inflation. This is the second reason to own gold : Gold is the only form of money which has maintained its purchasing power over a long period of time.

US Money Supply Versus The Gold Price

Throughout the 1970s and early 1980s, American investors were gripped by a fear that their national currency would continue to lose purchasing power . There was a complete lack of confidence in the government's ability to restrict the expansion of the money supply, culminating in panic buying of precious metals in 1979/1980 as investors desperately sought to protect themselves from the effects of inflation.

The response of the US Federal Reserve at the time was to put the brakes on money supply growth through the instigation of extremely high interest rates. This policy achieved its purpose and by 1982 the rate of increase in the money supply was trending downwards, interest rates had fallen from their peaks, and the fear of inflation had abated. Investment capital had responded to the changed situation by moving from commodities into financial assets, and the great equities bull market had begun.

Below is a chart showing the relationship between the total US money supply (M3), M3 growth rates (shown as annualised monthly figures), and the gold price, from 1972 to present time. It can be seen from this chart that the gold price tracked the increase in money supply from 1972 until 1982, apart from the 1979/1980 spike. Between 1982 and the early 1990s the M3 growth rate trended downwards to a low point of zero in 1992. During this period money flowed into financial assets as confidence was restored in the ability of the Fed to control inflation, whilst the gold price remained relatively stable (apart from the 1985 to 1987 period when the G5 tried to "fix" the US trade deficit by engineering a 40% depreciation in the US dollar, which in turn led to a rising gold price and culminated in the 1987 share market crash as foreign capital panicked out of US assets) .

Since 1993, the M3 growth rate has been trending upwards and is currently around 9%. Studies have shown that increasing money supply growth rates lead the commodities markets by 1.5 to 3 years. This means that we should have seen a rising gold price in US dollars by 1995/1996. What we have actually witnessed, however, is a declining gold price. In fact, with money supply now increasing at rates not seen since the early 1980s and the gold price falling almost continuously since February 1996, the chart shows a distinct divergence between the two . This has contributed to the currently popular belief that increasing the quantity of money no longer results in rising prices.

As mentioned at the beginning of this article, gold has performed quite well during recent years when measured in terms of almost any currency with the exception of the US dollar. In other words, gold has performed its historical function as a store of value for anyone living outside the US. However, since 1995, the time at which we would have expected to see the increasing supply of US dollars begin to have an impact on the gold price, a massive shift of investment into the US dollar has occurred. The excess dollars which have been created due to expanding US debt levels and trade deficits have been absorbed by foreign investors looking for stability. The seemingly insatiable demand of foreign capital for US dollars has been stimulated even further by the Asian financial crisis. The US is now seen as the only safe place in the world for investment.

The demand of foreign capital for US dollars and US debt has allowed US interest rates to remain at relatively low levels, given the money supply growth rate and the strength of the economy, and has supported a speculative boom in the US stock market since 1995. The US stock market is itself supported by debt, and that debt is in turn supported by the value of the stock market. A significant downturn in the stock market would most likely lead to widespread defaults on loans, a financial collapse and a severe recession.

This situation will be avoided at all costs by the US political and monetary authorities using the power of the US Federal Reserve to "…discount loans and other assets of banks or other private depository institutions, thereby converting potentially illiquid private assets into riskless claims on the government in the form of deposits at the central bank." If the Fed must purchase every non-performing loan in the US in order to avoid a serious recession, it will be done. A boom feeds on itself and is always propelled by liquidity. Once a speculative boom has occurred, liquidity must be maintained in order to avoid a bust. Look for continued high levels of US money supply growth.

Conclusion

The entire US financial system is based on confidence - the confidence of foreign investors who continue to pour money into US dollar assets, and the confidence of local investors who are betting their life savings on a continued stock market boom. Recent experience in Asia suggests that this extraordinarily high level of confidence in financial assets may be overdone.

In the near term, the above-ground stock of gold will most likely continue to be a hindrance to any sustainable rally in the gold price. The supply of gold will probably increase over the coming months as European CBs sell gold in the lead up to selection of the initial EMU participants in May 1998. At the same time, uncertainty regarding EMU and on-going problems in Asia should continue to support the US dollar.

However, it must be remembered that there are 3.8 billion ounces of gold in the world and the supply is increasing by 1.75% each year (probably less for the next few years due to mine closures), whereas there are 5,300 billion US dollars in the world and the supply is increasing by 9% each year. The end result is obvious.

Gold Mining in Malaysia

The total amount of raw gold produced in 2003 was about 4,739 kilograms.

Gold mining was carried out in the states of Pahang (5), Kelantan (2) and Terengganu (1).

Pahang produced 99% of the country’s total raw gold production. A total of 836 workers were employed in these mines at the end of the year.

Sejarah Emas Dunia

Komoditi emas mula didagangkan di Spot Market bermula pada tahun 1992, ianya bermula dengan harga serendah $345.63 per oz bersamaan RM 38.50 segram (mengambil kira $1 = RM 3.50), kemudian pada tahun 1996, di sebabkan kemelesetan ekonomi dunia harga emas telah menurun kepada paras terendah untuk selama2nye iaitu pada harga $249.42 per oz. Disebabkan krisis kemelesetan yang begitu hebat pada waktu itu, ekonomi dunia dan komoditi emas mengambil masa selama hampir 5 tahun untuk proses "Recovery" atau baik pulih semula iaitu sehingga pada tahun 2001.


Sejak dari itu harga emas di pasaran dunia terus-menerus meningkat saban tahun sehinggalah pada tahun 2007, sekali lagi krisis ekonomi berlaku di sebabkan "Sub-Prime Crisis" atau krisis sub-prima sekaligus menyebabkan harga emas menurun daripada $963.69 kepada $724.63. Namun, berpandukan kisah hitam 10 tahun yang lalu, beberapa langkah drastik telah diambil oleh A.S untuk memperbaiki krisis itu, dan dalam hanya beberapa bulan sahaja harga emas telah kembali meningkat kepada $981.18 per oz. Bertitik tolak dari krisis dunia kali ke-2 ini, masyarakat telah mula sedar bahawa punca kepada semua krisis ekonomi dunia ialah disebabkan pengamalan sistem ekonomi kapitalis yang menyebabkan berlakunya Inflasi (kejatuhan nilai wang) dari tahun ke tahun di seluruh dunia.

Kesinambungan itu, ramai masyarakat telah mula menyimpan kekayaan di dalam bentuk emas fizikal berbanding wang ringgit, yang mana ianya memegang nilainya sendiri dan tidak seperti wang kertas yang mana nilainya perlu bersandarkan dengan rizab simpanan emas di sesebuah negara itu. Sejak itu harga emas terus meningkat saban tahun iaitu dari $981.18 per oz, kini telah mencapai paras tertinggi dalam sejarah harga emas dunia iaitu melebihi $1500.00 per oz!! Lihat, betapa tingginya permintaan terhadap besi kuning ini sedangkan penawarannya amat terhad dan ianya adalah semulajadi.

Justeru, marilah sama-sama kita menyimpan kekayaan dalam bentuk emas, agar wang yang disimpan tidak susut nilainya di telan Inflasi.

Feng Shui Stock 2011

Untuk dikongsi bersama, just for the fun of it...

Harga Emas 1 Tahun

Harga Emas 6 Bulan

Harga Emas 10 Tahun

Harga Emas 5 Tahun

History of Gold Coins

Gold Coins
Four millennia of gold coin production and use - a brief history.


Reverse of Celtic Gold Stater of Cunobelin

The First Gold Coins
 
Lydia 643 BC
In about 643 to 630 B.C., the Lydians had started to produce the first coins. They were quite crude, and were made of electrum, a naturally occurring pale yellow mixture of gold and silver. These first coins were similar in composition to alluvial deposits found in the silt of the River Pactolus, which ran through the Lydian capital, Sardis.


Obverse of Celtic Gold Stater of Cunobelin

The Midas Touch
These gold deposits were believed to have originated by King Midas washing himself in the river to cleanse himself of his "golden touch" which had the inconvenient effect of turning even his food into gold.

Gold And Silver
By about 560 B.C., the Lydians and Ionians had learned how to separate the gold from the silver, so that King Croesus was able to issue the world's first bi-metallic coinage. Bi-metallic in the sense that there were gold coins and silver coins. Shortly afterwards, in 546 B.C., Croeseus was captured by the Persians, who came to adopt gold as the main metal for their coins.

Gold Or Silver?
The Greeks to the west of Ionia believed that silver should be the main metal used for coins. Following this there have, for most of history, been regions which favoured silver and other nations which favoured gold as their main coinage and currency metal. Where the two existed side by side, then gold was usually considered the more important. In most cases, ready availability of one metal rather than the other exerted a practical influence over the choice.

The Celts
In Britain and elsewhere, a number of Celtic tribes issues coins in gold, silver, potin, and base metals. The Celts were here before the Romans, some became assimilated into Roman civilisation, others moved or were defeated. It is often stated that they left no written records, but this is inaccurate as some of their coins were inscribed. Please see the magnificent Celtic gold stater in our photograph. It bears the inscription "CUNO" an abbreviation for Cunobelin, a chieftain of the Catuvellauni tribe. It constitutes a written record, as do all the other inscribed Celtic coins, however most Celtic coins are unfortunately uninscribed. They also clearly show that the Celts used written language, even if other evidence is not extant.
We feel tempted to add the joke that Cunobelin invented his own language which was named after him, although we cannot remember the name of the language, it is on the tip of our tongue!

The Romans
The early Roman Republic issued few coins in gold, their main coinage being in silver, with bronze or copper for small change. From the death of Julius Caesar, gold coinage came to be an important part of the Roman coinage system. The Romans took a very practical view in exploiting natural resources in the areas of their conquest, and issued coins in gold, silver, and copper according to the resources of the region.

The First Sovereign

The First One Pound Coin
The gold sovereign came into existence in 1489 under King Henry VII.

The Pound Sterling
The pound sterling had been a unit of account for centuries, as had the mark. Now for the first time a coin denomination was issued with a value of one pound sterling. This new coin weighed 240 grains which equals 0.5 troy ounces or 15.55 grams, and was made using the standard gold coinage alloy of 23 carat, equal to 95.83% fine.

The First Design
The obverse design showed the King seated facing on a throne, a very majestic image. It is from this image of the monarch or sovereign that the new coin gained its name - the sovereign. The reverse type is a shield bearing the royal arms, on a large double Tudor rose.
One of the reasons for the issue of the sovereign was to imitate similar large gold coins being produced on the Continent, another was to impress Europe with the power, prestige and success of the new Tudor dynasty.

Leading Designer of the Age
For the introduction of this important new coin, and later the shilling, the leading German engraver Alexander of Bruchsal was commissioned.
The new sovereign has been described as "the best piece ever produced from the English mint".
Alexander came to be described as "the father of English coin portraiture".
He also produced the testoon or shilling of which it has been said that "modern coinage begins with the shilling of Henry VII".

Doubles and Trebles
A double or treble sovereign was also issued for Henry VII from the same dies as the sovereign, but thicker and heavier. These were possibly intended solely as presentation pieces.
This first sovereign occurs with a number of minor type variations all of which are rare, currently cataloguing from £7000 upwards.

Henry VIII And The First Half Sovereign
Sovereigns were then struck for Henry VIII from 1509, and a half sovereign was also introduced during his reign.
In 1526 the official value of English gold coins was raised by 10%, making a sovereign worth 22 shillings (22/- or 22s.), and then shortly after they were again revalued to 22s6d. A number of new gold coin denominations were introduced with a lower gold fineness of "only" 22 carat, equal to 91.66%.
In 1544 a lighter sovereign was issued, weighing 200 grains, but still in 23 carat gold alloy.

Edward VI
Under Edward VI, sovereigns, half sovereigns, and double sovereigns were struck. His first sovereigns, issued between January 1549 and April 1550, were only in 22 carat gold. From 1550 to 1553, "fine" sovereigns were once again issued with a value of thirty shillings, and also a "standard" sovereign at twenty shillings.

Mary
During the sole reign of Mary, "fine" sovereigns were struck with a value of thirty shillings (30/- or 30s.), but during her slightly longer joint reign with Philip, no sovereigns were issued.

Elizabeth I
During the long reign of Elizabeth II, "fine" gold sovereigns, with a very high (99.4%) gold content, continued to be issued with a value of thirty shillings. A separate one pound gold coin was also issued, obviously with a value of twenty shillings.

James I - The Unite Appears
In the first coinage of James I, from 1603 to 1604, sovereigns of twenty shillings were issued before being discontinued, the previous pound coin was made lighter and renamed as a "unite". So after 115 years, this was the last sovereign to be issued until the emergence of the modern gold sovereign in 1817.

Unites Laurels and Guineas

The Unite Replaces The Sovereign
From James I's second coinage in 1604, the sovereign was discontinued in favour of the "unite", also valued at one pound. It was called a unite to mark the unification of England and Scotland upon the accession of James VI of Scotland to the British throne, as James I of England.

The Laurel Comes and Goes
In 1612 the unite was revalued at 22 shillings, and in 1619 was replace by a lighter one pound coin known as the laurel. The laurel weighed 140.5 grains.

The Unite Continues
The unite was continued in the reign of Charles I, being again valued at twenty shillings, and continued in production during "The Commonwealth", and the early hammered coinage of Charles II until 1662.

Machine Made Guineas Arrive
With the introduction of regular machine made "milled" coinage under Charles II, the guinea was introduced in 1668. It was so called because the gold from which many were made was imported from the African state of Guinea by the Africa Company. The badge of logo of The Africa Company was an elephant and castle (howdah), and this symbol, or sometimes just the elephant appeared on many of the guineas.

When a Guinea was a Pound
When the guinea was originally introduced it had a value of twenty shillings, Because of the inflationary effects of war, the value of the guinea soon increased to 21 shillings. By March 1694, it had reached 22 shillings, and in June 1695 reached a peak of thirty shillings. At this crisis point, there followed great public debate, which included figures such as Sir Isaac Newton, as to whether the solution was to devalue the gold coinage or to restore the silver coinage. Restoration won, and 1696 saw a great "Silver Recoinage", at the same time the principle was established that the pound sterling would be a fixed weight of gold, and this principle effectively created the "gold standard". The guinea continued to be the main gold coin until 1813 under George III.

The Modern Sovereign

New Coinage - New Mint
In 1816, there was a major change in the British coinage, powered by the Industrial Revolution. The Royal Mint moved from The Tower of London to new premises on nearby Tower Hill, and acquired powerful new steam powered coining presses designed by Matthew Boulton and James Watt. the modern sovereign was born!

Saint George & The Dragon
A new reverse design was introduced featuring Saint George slaying a dragon, designed by a brilliant young Italian engraver, Benedetto Pistrucci. This beautiful classic design remains on our gold sovereigns today, almost two hundred years later, and for most of its life must have been one of the worlds most widely recognised coins.

Gold Gives Way To Paper

The First British Paper Money
Although the first "banknote", actually a goldsmith's note, known to exist was issued by Laurence Hoare in 1633, and the earliest known cheque was issued in 1659. Paper money did not supersede metal until the second decade of the 20th century.

Royal Mint Stops Gold Sovereign Production
During the first world war, Britain needed gold bullion to finance the war effort. Banknotes were introduced into regular circulation, and within a few years, the gold sovereign ceased to be used in everyday transactions. Production at the Royal Mint stopped in 1917, although some were minted again in 1925.

Commonwealth Mints
The branch mints continued to produce sovereigns, Ottawa in Canada until 1919, Bombay in India in 1918, Sydney Australia until 1926, Melbourne and Perth Australia until 1931, and Pretoria South Africa until 1932.

1933 - The End of The World for Gold Coinage
By 1933, almost the whole world had stopped production of gold coins for circulation. We can find only seven countries which issued gold coins in 1933, and most of those were commemorative, historical, or medallic issues, not intended primarily for circulation. Of these, the lowest listed catalogue value is for Czechoslovakian One Dukat pieces, which contain about one ninth of an ounce of fine gold; their catalogue value is about three times their intrinsic gold value, and we very seldom see gold coins of this date.
There are a number of other similar dates during which there were very few gold coins minted.

The Investment Market
A number of countries continued to issue gold coins for purchase by investors in the period from the end of the first world war. This has usually been to supply domestic demand for citizens to maintain a "hedge" against currency fluctuations or failures, and against political upheaval. Central and National Banks will have kept many of the previously circulating gold coins as part of their gold bullion holdings, many will have been melted down, and others will have been re-issued to meet demand.

Premium Prices
Increasingly from about 1914, gold coins were traded at a premium to their gold content, especially as most countries did not regularly issue any new gold coins. Certain gold coins have been internationally recognised, these include the British gold sovereign, the American double eagle, and the Swiss twenty francs. Many other types of gold coins had a popularity within their more immediate neighbouring countries, with linguistics also playing their part in the supply - demand situation. There is an obvious logic and attraction in using gold coins whose inscriptions the owner could easily read.

Low Premiums & International Bullion Coins
With the introduction of the Krugerrand in 1967, South Africa became the first country to issue a modern, low premium, bullion gold coin. The most obvious attribute of the Krugerrand which clearly contributed to its success, was its convenient and easy to remember gold content - exactly one ounce. Almost all previous gold coins contained odd amounts of gold, which makes it more difficult to know or calculate quickly the precise value of ones investment.
Such was the success of the Krugerrand, or Kruger, as it is familiarly known, that many millions were produced. In 1980, South Africa introduced fractional sizes containing a half ounce, quarter ounce, and tenth ounce of fine gold. Numerous other countries also copied the South Africans and produced their own versions of one ounce gold bullion coins, and usually the fractional sizes also.

Special Occasions
In Britain, no further sovereigns were then issued until 1957, although sovereigns were included in the George VI proof set of 1937 which was available for collectors, and sovereigns were also minted but not issued for Edward VIII in 1937, and for Queen Elizabeth II in 1953.
Many countries now issue gold coins to commemorate special occasions, and for sale to collectors. Although the one ounce bullion coins were intended for investment use, there are many who collect them by date and type, some world mints have recognised this, and produce attractive and varied designs in their bullion coin series, together with proof versions. A well designed coin can rightly be considered as a miniature work of sculptural or medallic art.

Gold as Money

Gold, measured out, became money. Gold's beauty, scarcity, unique density (no other metal outside the platinum group is as heavy), and the ease by which it could be melted, formed, and measured made it a natural trading medium. Gold gave rise to the concept of money itself: portable, private, and permanent. Gold (and silver) in standardized coins came to replace barter arrangements, and made trade in the Classic period much easier.

Gold was money in ancient Greece. The Greeks mined for gold throughout the Mediterranean and Middle East regions by 550 B.C., and both Plato and Aristotle wrote about gold and had theories about its origins. Gold was associated with water (logical, since most of it was found in streams), and it was supposed that gold was a particularly dense combination of water and sunlight.

Their science may have been primitive, but the Greeks learned much about the practicalities of gold mining. By the time of the death of Alexander of Macedon (323 B.C.), the Greeks had mined gold from the Pillars of Hercules (Gibraltar) all the way eastward to Asia Minor and Egypt, and we find traces of their placer mines today. Some of the mines were owned by the state, some were worked privately with a royalty paid to the state. Also, nomads such as the Scythians and Cimmerians worked placer mines all over the region. The surviving Greek gold coinage and Scythian jewelry both show superb artistry.

The Roman Empire furthered the quest for gold. The Romans mined gold extensively throughout their empire, and advanced the science of gold-mining considerably. They diverted streams of water to mine hydraulically, and built sluices and the first 'long toms.' They mined underground, also, and introduced water-wheels and the 'roasting' of gold-bearing ores to separate the gold from rock. They were able to more efficiently exploit old mine-sites, and of course their chief laborers were prisoners of war, slaves, and convicts.

A monetary standard made the world economy possible. The concept of money, (i.e., gold and silver in standard weight and fineness coins) allowed the World's economies to expand and prosper. During the Classic period of Greek and Roman rule in the western world, gold and silver both flowed to India for spices, and to China for silk. At the height of the Empire (A.D. 98-160), Roman gold and silver coins reigned from Britain to North Africa and Egypt.
Money had been invented. Its name was gold.

History of Gold Standard

In the mid-1800's, countries began adopting the gold standard as a way to standardize transactions in a blossoming world trade market. By World War I, most countries were on the gold standard, with mixed results. Between 1914-1919, most countries suspended the gold standard so they could print enough money to pay for their involvement in the war. After the war, countries returned to a modified gold standard, but abandoned it during the Great Depression. (History.com, "Gold Standard")

In 1941, most countries adopted the Bretton-Woods system, which set the exchange value for all currencies in terms of gold. It obligated member countries to convert foreign official holdings of their currencies into gold at these par values. However, many countries simply pegged the value of their currency to the dollar, thus making the dollar the defacto world currency. Gold was set at $35 per ounce. (Source: National Mining Association, History of Gold)

The strong dollar led to inflation and a large balance of payments deficit in the U.S. which in turn helped to create stagflation. The U.S. started to deflate the dollar in terms of its value in gold to curb double digit inflation.

In 1971, gold was repriced to $38 per ounce, then again to $42 per ounce in 1973. As the dollar devalued, it motivated people to sell their greenbacks for gold. Finally, in late 1973, the U.S. government decoupled the value of the dollar from gold altogether. The price of gold quickly shot up to $120 per ounce in the free market.

World Gold Demand

Four Major Sources of Demand for GOLD:

1) Jewelry fabrication

2) Industrial applications

3) Governments and central banks

4) Private investors

1) Jewelry fabrication: The largest source of demand is the jewelry industry. In recent years, demand from the jewelry industry alone has exceeded Western mine production. This shortfall has been bridged by supplies from reclaimed jewelry and other industrial scrap, as well as the release of official sector reserves. Gold's workability, unique beauty, and universal appeal make this rare precious metal the favorite of jewelers all over the world.

2) Industrial applications: Besides jewelry, gold has many applications in a variety of industries including aerospace, medicine, electronics and dentistry. The electronics industry needs gold for the manufacture of computers, telephones, televisions, and other equipment. Gold's unique properties provide superior electrical conducting qualities and corrosion resistance, which are required in the manufacture of sophisticated electronic circuitry. In dentistry, gold alloys are popular because they are highly resistant to corrosion and tarnish. For this reason gold alloys are used for crowns, bridges, gold inlays, and partial dentures.

3) Governments and central banks: The third source of gold demand is governments and central banks that buy gold to increase their official reserves.

4) Private investors: Finally, there are private investors. Depending upon market circumstances, the investment component of demand can vary substantially from year to year.

Uses of Gold

Gold's Usefulness as safe haven:
The geo-political and world economic structure is currently undergoing major change-some have even called the situation an "upheaval." This means that the investment outlook, particularly for certain parts of the world, is more unpredictable than usual. Under these circumstances, it is logical to conclude that certain investment portfolios should include real (non-paper) assets such as commodities for protection against a potential decline in the paper markets.

Gold's Usefulness as an Asset Diversifier:
Most portfolios are invested primarily in traditional financial assets such as stocks, bonds and mutual funds. Adding gold to a portfolio introduces an entirely different asset; a tangible or real asset, thus increasing the portfolio's degree of diversification. The purpose of diversification is to protect the total portfolio against fluctuations in the value of any one asset or type of asset. Gold does exactly that.

The reason is basic:
The economic forces which determine the price of gold are different from, and in many cases opposed to, the forces which determine the prices of most financial assets. The price of an equity depends on the earnings and growth potential of the company it represents. Likewise, the price of a bond depends on its safety, its yield, and the yields of competing fixed income investments.

The price of gold, on the other hand, depends on different factors:
Worldwide physical supply and demand for gold, movements in foreign exchange rates, inflation, interest rates and political turmoil. The effects of all these factors are somewhat complex and variable. But the important point to remember is simply that they cause the price of gold to move independently of the prices of financial assets.

Ancient Gold

The Incas referred to gold as the "tears of the Sun."

Homer,in the "Iliad" and "Odyssey," makes mention of gold as the glory of the immortals and a sign of wealth among ordinary humans. In Genesis 2:10-12, we learn of the river Pison out of Eden, and "the land of Havilah, where there is gold: and the gold of that land is good?"

As far back as 3100 B.C., we have evidence of a gold/silver value ratio in the code of Menes, the founder of the first Egyptian dynasty. In this code it is stated that "one part of gold is equal to two and one half parts of silver in value." This is our earliest of a value relationship between gold and silver.

In ancient Egypt, around the time of Seti I (1320 B.C.), we find the creation of the first gold treasure map now known to us. Today, in the Turin Museum is a papyrus and fragments known as the "Carte des mines d'or." It pictures gold mines, miners' quarters, road leading to the mines and gold-bearing mountains, and so on.

Where is that gold mine located? Well, you know how it is with treasure maps - there's always something a little vague about them, to throw you off the trail.

Modern thought is that it portrays the Wadi Fawakhir region in which the El Sid gold mine is located, but the matter is far from settled. Jason and the Argonauts sought the Golden Fleece around 1200 B.C.

That Greek myth makes more sense when you realize that the fleece that it refers to is the sheep's fleece used in the recovery of fine placer gold.

Early miners would use water power to propel gold-bearing sand over the hide of a sheep, which would trap the tiny, but heavy, flakes of gold. When the fleece had absorbed all it could hold, this 'golden fleece' was hung up to dry, and when dry would be beaten gently so that the gold would fall off and be recovered.

This primitive form of hydraulic mining began thousands of years ago, and was still being used by some miners as recently as the California gold rush of 1849.

The first use of gold as money occurred around 700 B.C., when Lydian merchants produced the first coins. These were simply stamped lumps of a 63% gold and 27% silver mixture known as 'electrum.' This standardized unit of value no doubt helped Lydian traders in their wide-ranging successes, for by the time of Croesus of Mermnadae, the last King of Lydia (570 -546 B.C.), Lydia had amassed a huge hoard of gold. Today, we still speak of the ultra-wealthy as being 'rich as Croesus.'

A Brief History of Gold

A child finds a shiny rock in a creek, thousands of years ago, and the human race is introduced to gold for the first time.

Gold was first discovered as shining, yellow nuggets. "Gold is where you find it," so the saying goes, and gold was first discovered in its natural state, in streams all over the world. No doubt it was the first metal known to early hominids.

Gold became a part of every human culture. Its brilliance, natural beauty, and luster, and its great malleability and resistance to tarnish made it enjoyable to work and play with.

Because gold is dispersed widely throughout the geologic world, its discovery occurred to many different groups in many different locales. And nearly everyone who found it was impressed with it, and so was the developing culture in which they lived.

Gold was the first metal widely known to our species. When thinking about the historical progress of technology, we consider the development of iron and copper-working as the greatest contributions to our species' economic and cultural progress - but gold came first.

Gold is the easiest of the metals to work. It occurs in a virtually pure and workable state, whereas most other metals tend to be found in ore-bodies that pose some difficulty in smelting. Gold's early uses were no doubt ornamental, and its brilliance and permanence (it neither corrodes nor tarnishes) linked it to deities and royalty in early civilizations .

Gold has always been powerful stuff. The earliest history of human interaction with gold is long lost to us, but its association with the gods, with immortality, and with wealth itself are common to many cultures throughout the world.

Early civilizations equated gold with gods and rulers, and gold was sought in their name and dedicated to their glorification. Humans almost intuitively place a high value on gold, equating it with power, beauty, and the cultural elite. And since gold is widely distributed all over the globe, we find this same thinking about gold throughout ancient and modern civilizations everywhere.

Gold, beauty, and power have always gone together. Gold in ancient times was made into shrines and idols ("the Golden Calf"), plates, cups, vases and vessels of all kinds, and of course, jewelry for personal adornment.

The "Gold of Troy" treasure hoard, excavated in Turkey and dating to the era 2450 -2600 B.C., show the range of gold-work from delicate jewelry to a gold gravy boat weighing a full troy pound. This was a time when gold was highly valued, but had not yet become money itself. Rather, it was owned by the powerful and well-connected, or made into objects of worship, or used to decorate sacred locations.

Gold has always had value to humans, even before it was money. This is demonstrated by the extraordinary efforts made to obtain it. Prospecting for gold was a worldwide effort going back thousands of years, even before the first money in the form of gold coins appeared about 700 B.C.

In the quest for gold by the Phoenicians, Egyptians, Indians, Hittites, Chinese, and others, prisoners of war were sent to work the mines, as were slaves and criminals. And this happened during a time when gold had no value as 'money,' but was just considered a desirable commodity in and of itself.

The 'value' of gold was accepted all over the world. Today, as in ancient times, the intrinsic appeal of gold itself has that universal appeal to humans. But how did gold come to be a commodity, a measurable unit of value?