On the Edge Financial Daily: Gold ends at US$1,096, up 24.8% in 2009
- NEW YORK: Gold prices sealed their biggest yearly gain in three decades with a small advance on Thursday, rising for an unprecedented ninth consecutive year as dollar-hedging traders and central banks joined the rally even as safe-haven buying subsided, according to Reuters.
At the informal spot-market close of US$1,096.20 an ounce, gold gained US$218 this year, a sum eclipsed in recent history only by 1979's US$286 surge -- gains that proved fleeting as bullion relapsed two years later. On a percentage basis gold rose 24.8 percent, short of 2007's 31 percent rise.
After 2008's roller-coaster, this year was one of fairly consistent gains for bullion, favored as a hedge against economic uncertainties after the worst economic crisis since the Great Depression.
Gold hit a record high above US$1,220 on December 3 on a combination of renewed central bank interest, worries over paper currencies depreciation and long-term inflation fears due to massive economic stimulus programs.
Central banks played a key role in aiding the rally during a year in which China revealed that it had secretly increased its reserves over the past five years to the world's fifth-largest by buying up domestic production, while India nearly doubled its holdings by buying half of the IMF's stockpile slated for sale.
The tone for the precious metals market in early 2010 will now hinge on whether the U.S. dollar will continue its year-end rally, and if the central banks will keep interest rates at record lows to boost economic growth.
Other precious metals staged equally impressive gains after last year's deep decline, with platinum rising a record 58.7 percent and palladium up 220 percent on improving economic conditions, as well as hope for a boost in physical demand from new U.S. exchange traded funds expected to launch soon. Silver also jumped by a record 49.1 percent. - Reuters
How impressive really is the performance of Gold?
From the above article, it states that Gold gained some 24.8% in 2009. Now that would have been one great investment, yes?
Now, if you are a Malaysian, one of the much suggested investment for gold is to buy them Kijang coins.
Let's check out how the Kijang coins have performed in 2009.
The following is the screen shot taken from Bank Negara website.
As can be seen from the screen shot, a kijang buyer would have to pay some rm 3239 for 1 oz of Kijang gold coin.
Here's the year end prices.
Now if I had purchased 1 oz of Kijang cold coin at 3239 on 2nd Jan 2009, the price I could get for the gold coin is 3669. This is the price that the bank will buyback these coins from me.
Which means I would see a return of investment of rm 430.00 from an investment outlay of rm 3239. Or a return of investment of 13.2%.
Well 13.2% is impressive. It's decent. However, it pales in comparison from the gain of gold prices (in USD) of 24.8%!
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