Gold Vehicles in Malaysia

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The easiest way to get into the gold action in Malaysia, would be via Maybank's Gold Savings Account.

This is an obscure deposit account, and if you pop into a random branch and ask about it, chances are, the teller doesn't even know that they have such a product. And a supervisor from the back has to dig up the protocol notebook somewhere to figure out how to create and fund the account for you.

But after a while, you get used to it.

Earlier this week, I walked into the PJ main branch at PJ State. It's one of the few branches where you can purchase the Kijang Emas gold bullion. While I was there, I also decided to ask about how I might withdraw my gold from the Gold Savings Account.

It's obvious that I can withdraw it as cash, but the website also promises that I can withdraw them as gold wafers. And there is an extra charge for doing so. I wanted to know how much are the charges. Didn't expect this to turn into an hour long consult with the banker, and several calls to the Shah Alam main branch and the KL main branch.

The PIC of the gold account in PJ doesn't even know what she's selling. And Shah Alam was telling her that I'ld have to sell my gold from the savings account at the bank Buying price (where I'll lose 8.8% in 'conversion'), and THEN use that gold to buy the wafers from the bank at the Selling price again!?! I'm estimating that such a transaction will cost me an estimated 13%.

It made no sense at all. I asked her to clarify it further with KL. And only then I got what I needed.
I can withdraw in 10g, 20g, 50g, & 100g wafers, with a delivery charge of rm25, rm30, rm40, & rm50 respectively. Walk to counter 20/21 at Menara Maybank.

With these numbers, I worked out how much it'll cost you to own gold via these vehicles.

If you want to hold about 3oz of gold in your hands, it'll be cheaper to buy the Kijang Emas coins. It'll be cheaper by about RM20.

OR, you can keep your gold in the savings account, and let Maybank guard it, insure it, sweat over the safe-keeping of the gold, until such a time when you actually want that gold in your hands. It'll only cost you rm20 more.

Which is a good deal. As long as Maybank stays upright. It's too easy for them to sell you gold that they may not actually own in their vaults. Who's the governing body in Malaysia that watches over this? Does Maybank even have all the physical gold they need to cover the deposits? Or are most of them on paper only, or is the gold already leased away, like what every reserves bank in the world is doing.

Maybank might just one day say that they've no physicals, but will liquidate your accounts through cash settlement. And you might be left holding bundles and bundles of paper that's cheaper to burn than the charcoal you can buy with them. (That's a cooking stove you see in the photo above, and bundles of German Marks just before Hitler rose to power.)

But let's hope that none of this comes to pass of course, that the world will continue to move around the sun.

Or why not buy stocks and shares in gold mines and other mining companies? That's a good way to make 10x more money, if you're lucky. But there, you'll need to know how to read company accounts, know how much hedging there is in their books, know some geology to read which exploration companies have potential, and be environmentally aware which mine is spewing its polluting filth into the ocean and getting sued by the Indonesian government etc...

But can't buy shares overseas in Malaysia. So not losing sleep over that bridge at the moment.

What I'm curious now, is the buying and selling price of Kijang Emas and GSPA at Maybank. I could be mistaken, but I could swear that the percentage premium I'm paying for the gold has changed a fair bit. Lucky I kept some records from last year, so I can check later. It's possible that the increased spread is a consequence of the depegging of the RM from the USD.