Come on, Invest in Gold

Have you ever heard our parents say this, "If you have extra money, just buy gold, because the price of gold always goes up, and you can keep the gold at home. Well, one day if you need money, you can sell the gold again."

Well, on the other hand, there are also people who think that gold is an old-fashioned investment that doesn't bring much profit.

So which one is right?
Is it true that the price of gold always goes up, or is it possible that now is no longer the time to buy gold?

Well, in this article, I will try to discuss the ins and outs of gold investment. Before I discuss further, I want to emphasize this first, that what I am discussing is not gold in the form of jewelry, but gold bars which are usually used for investment. Basically, gold investment can be in the form of, the first is in the form of gold bars. And the second is in the form of digital gold. I will try to discuss one by one. The first is gold bars.

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If you want to invest in gold bars, you can directly buy the gold at pawnshops, Antam outlets, gold shops, and even online stores. Before buying, make sure that the gold shop is trusted, so that the gold you buy is guaranteed to be authentic. The sizes of the gold bars sold themselves vary. Usually it starts from half a gram, up to one kilogram. Well, my suggestion is this, if you are interested in investing in gold bars, rather than buying half a gram in installments, you better save the money first, so you can buy gold in large grams, say 10 grams. Because if you buy half or one gram, the price is more expensive than 10 grams of gold. Oh yes, the price of gold bars refers to the Antam selling price, which changes every day. Moving on to the second one, namely digital gold.

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Well, you could say that this is more contemporary. So if you invest in digital gold, you don't hold the gold in physical form. But your gold ownership is still recorded and can be traded digitally. Currently, there are many platforms that provide digital gold transactions. For example, there is BukaEmas from BukaLapak and TokoPedia gold. Now, let me discuss one example, namely BukaEmas. In BukaEmas itself, the minimum gold purchase is 0.0001 grams. This is if calculated under one hundred Rupiah. Just imagine, with a capital of one hundred Rupiah, you can buy gold. Well, it is said that this is very suitable for those of you who want to invest in gold, but have limited money. So you can pay in installments, say ten thousand a day. Although this gold is in digital form, the physical gold bars are still there. For example, in the case of BukaEmas, this is a form of cooperation with PT. Aneka Tambang, or Antam. So if you buy digital gold at BukaEmas, the physical gold assets are stored in Antam's safe. Now, maybe some of you are wondering, "If you buy digital gold like this, can the gold actually be taken in the form of gold bars?"

Well, at BukaEmas it is possible. As long as your gold ownership is above one gram, or multiples thereof. Oh yes, for the exchange of gold bars at BukaEmas, you will be charged a certificate fee and shipping costs. So later the gold will be sent directly to your address.

Now I will discuss what influences the increase and decrease in the price of gold. In short, the price of gold is influenced by dimensions and supply. Dimensions can be said to be the amount of demand for gold. And supply is the availability of gold itself. If the dimensions of gold are high, while the supply is low, the price of gold will increase. And vice versa. Well, you also need to know what affects the gold dimension. There are various things that affect the gold dimension, for example, the economic and political conditions at home and abroad. Then it could also be due to the strengthening or weakening of the US Dollar, to the monopoly of gold purchases by the Central Bank.

Now I will try to discuss one example. How can world economic and political conditions affect the buying and selling price of gold?

Now I will try to discuss one example. How can world economic and political conditions affect the buying and selling price of gold?

At the beginning of 2020, there was a sensational case, namely the death of the Commander of the elite troops in Iran, his name is Qasem Soleimanu, due to a missile attack from the United States. At that time, investors were afraid that Qasem's death would end in conflict and trigger World War III. Well, in that condition, many investors ended up buying gold, because gold is considered a relatively safe haven in economic and political turmoil. Well, the dimensions are higher, so the price of gold also increases. This is proven by the increase in the price of gold in the range of dates. Now I will try to discuss what are the advantages and risks that we might get if we invest in gold. Let's start with the advantages first. The first advantage is that it can protect our assets. So, you could say that the value of our money continues to decline, eroded by inflation. The value of one hundred thousand rupiah in 2010 is not the same as the value of one hundred thousand rupiah in 2024. In short, what we can buy with one hundred thousand rupiah in 2010 is different from what we can buy with the same amount of money in 2024. Now we go back to gold, which generally has an annual increase in the price of gold that exceeds the inflation rate in that year. For example, the price of gold on January 20, 2020 was 658 thousand per gram. Meanwhile, the price on the same date in the following year was 769 thousand per gram. Up to 17%. Meanwhile, the inflation rate in 2020 itself was only 2.72%. The value of the asset is protected, and can even be profitable.

The second advantage is that it is easy to liquidate. In short, it is easy to buy and sell at any time. So, for example, you have gold bars, and you need money. Well, you can go directly to a gold sales outlet, then sell the gold you have. At that time, you can immediately get cash. Likewise, when you have digital gold assets. You can sell them immediately and the money from the sale can be transferred directly to your account. Not only that, Antam's gold has the London Bullion Market Association standard, or (LBMA).

Well, gold with that standard can not only be transacted domestically, but can also be transacted abroad, because it is recognized globally. This is also one of the advantages of investing in gold. Where people all over the world agree that gold is a valuable metal, whose value is recognized and standardized throughout the world.

Now I will discuss what risks we might get if we invest in gold.

The first risk is the large difference between the buying and selling prices of gold. So, if we buy gold, there are two prices that apply. The buying price and the selling price.

To match the perception, the purchase price that I mean is the price that we have to pay if we want to buy gold. While the selling price is the price that we receive if we sell the gold that we have. Oh yes, this selling price is also often referred to as the Buyback price or the repurchase price. Well, today the purchase price of gold is 768 thousand per gram. While the selling price is 683 thousand. If calculated, there is a difference of around 12.5%. For the purchase price and the selling price of gold. For example, if you buy 1 gram of gold at a price of 768 thousand, then suddenly in the afternoon you want to sell it again. The selling price has dropped to 683 thousand. Before anything else, it's already a loss of 12.5%.

Well, by looking at the difference that can be said to be quite large, in my opinion gold is not suitable for short-term investment. In my opinion, gold investment will only show results after a minimum of 5 years of storage. But even then, it's not necessarily profitable.

Why?

I'll try to discuss it in the next point.

The second risk is that gold investment is not necessarily profitable.

Huh, how come, doesn't the price of gold always go up?

So, like other commodities, the price of gold also fluctuates, always going up and down at certain times. In terms of trends, the price of gold does go up, but remember, how much we buy it for also affects whether or not we make a profit on gold.

For example, towards the end of 2012, the price of gold soared to 550,000 per gram. Then, in the middle of the following year, the price of gold plummeted to below 400,000 per gram. Imagine, the price of gold has fallen, plus the difference between the buying and selling prices is also far, as I have discussed in the first point.

Yes, it's a loss.

Not to mention the burden of tax and certificate fees that we have to pay. Instead of making a profit, we actually make a loss.

My suggestion is, if there is a trend that significantly affects the increase in the price of gold, hold off on buying gold. Wait until the price is stable or drops to its lowest point, then we buy it.

The last risk is loss. Just like other goods, of course this small and expensive item can be lost. If you have a lot of gold savings, let's say several kilograms, you certainly need a safe deposit box, or in other words, you may need storage in a save deposit book which is usually provided by the Bank. This save deposit book is certainly not free, there are fees that must be paid. These fees usually start from 200,000 to tens of millions per year, depending on the size of the book you use.

Greetings always compact.

By @midiagam