Posts Tagged ‘Kijang Emas’


Why you should not buy gold from gold shop

If you are buying gold for investment, gold shop is among the places you may go to purchase your investment. In Malaysia, our gold prices are standardized nationwide as most of our gold shop retailers are member of Federation of Goldsmith and Jewellers Association of Malaysia.

^ FGJAM website at

Federation of Goldsmith and Jewellers Association of Malaysia

FGJAM in short, set and publish standardized price for gold on a weekly basis. This creates a uniform gold price and healthy competition among gold retailers.

Price tag for a piece of gold in retail store is calculated by adding “Retail Gold Price” and “Workmanship”. Gold shop profits from margin over gold price as well as workmanship. Thus, for every gold ring, necklace or bracelet you buy from them, they will quote you two prices, the retail price of gold and workmanship.

Retail Gold Price

FGJAM price“Retail Gold Price” in summary is market price of gold – a price which includes overheads.

Salesmen need commissions, landlords want rents, security guards require bullets, lights run on electricity and a long list of other expenses. All these are compiled by FGJAM, which then published as “Retail Gold Price” on a weekly basis.


It is the price you pay for the time, effort and skill spent on creating a piece of jewelry.  It varies from one jewelry to another jewelry. The more complex a jewelry is, the more expensive the “Workmanship” is.

In general, you can bargain on the “Workmanship” price but not the “Retail Gold Price”. FGJAM prohibits discounting on “Retail Gold Price” – a rule which is agreed by all its members.
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Kijang Emas Spread Margin Check!

Kijang EmasI was doing my regular check on Kijang Emas price via Bank Negara website and to my surprise, the difference between the buying and selling price for 1 oz of Kijang Emas is now RM233!

Wow, that’s a huge gap!

I previously wrote an article about spread back in July and I shared with you how we can calculate the spread for gold and silver. You can read the post here: Understanding Spread for Buying and Selling Gold or Silver

It’s a little bit passed 2.00 am now so the price I am referring now is actually yesterday’s price. The buying price for Kijang Emas is RM6,014 and selling price is RM5,781. RM233 is an huge price gap in Kijang Emas price history.

Armed with Excel, I dived into the historic data on Kijang Emas prices and crunched it to check if the spread is still the same during this current wild bull ride on precious metals.

Formula for Buy and Sell Spread:

(Sell Price – Buyback Price)/Buyback Price X 100 = Spread %

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Understanding Spread for Buying and Selling Gold or Silver

It’s crucial to understand how does spread works before we start investing in precious metals. Spread in short means the margin between the buying and selling price. The formula is as followed:

Formula for spread:

(Sell Price – Buyback Price)/Buyback Price X 100 = Spread %

Example of calculation:

1 oz of Kijang Emas selling at RM5,060, buying back at RM4,864.

Apply the formula and therefore it’s: (5060 – 4864)/ 4864 x 100 = 4.03%

With that, the spread for 1 oz of Kijang Emas is 4.03%.

The higher the spread translate to the more ‘expensive’ it is to trade with the vendor while the lower the spread is the vice versa. Many of the time, we won’t feel the pinch immediately after purchasing our bullion. This is because most of the time, we don’t sell it back on that day same day that we bought.  But if you happened to do that for whatever reason, you will immediately lose out the spread. This is where the vendor makes their profits.

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