In recent weeks, the price of gold shot up rapidly and I was kicking myself for not being able to grab the opportunity and time to drop in to Public Bank to buy when the price was hovering at RM90+ per gram. It shot up to RM118 if I’m not mistaken, and I wasn’t sure if it would come down to the lows of RM80+ in the near future.

I thought even if I buy in at RM100 per gram, I could average out with my previous buy-ins and could still be making a good investment when the price sky rockets again.

But gold as a commodity is rather volatile. With the recent changes in the market, the price of gold has been coming down this week, and also just as quickly as the way it went up. Yesterday, at the close of business, it was about RM108 per gram. Today, it has gone up again to RM110. It’s really hard to read each day whether it will be going up or down!

Anyone who is seriously investing in gold has any insights to share?

To read more personal finance and money related articles, visit Penny Sense.

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The world oil price has been quite a yo-yo of late. As of this morning, it was reported that oil price is now at US$60.77, an all time low since March 2007. Markets around the world are also falling. Our KLSE is no different, as a quick check on the top counters today revealed most of them to be sliding. With such volatile market conditions, it’s save to say most investors have now become spectators, watching the market closely. Even when prices are at all time lows, the uncertainties surrouding us make it difficult to make the buying call.

On a brighter note, I wonder if the next petrol price revision, which is speculated to be happening around November 15 will bring us even further reduction. And I wonder how the Government’s negotiation with the retailers to reduce prices of goods is coming along.

On the topic of increasing consumer spending through lower contribution towards EPF, it has been confirmed that starting Jan 1 2009, all employees’ EPF contribution will automatically be changed from 11% to 8%. If you do not want to reduce your contribution, you need to fill out a form and have it processed by your employer. So set your reminder to do so when the time comes, if you are one of those who do not agree to lessen your savings for the future.

To read more personal finance and money related articles, visit Penny Sense.

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It’s good news coming on Halloween’s Day that our local fuel price will be further brought down by 15 cents, taking effect as early as tomorrow, 1 November 2008. It is also said that the price of fuel is also expected to be reduced further come 15 November 2008 but nothing is quite firm on this.

I personally did not expect so many reduction rounds going on because I thought the price of fuel was said to be studied once a month based on the latest changes on price of oil worldwide. We are moving more towards some international markets where fuel prices change daily and people actually watch closely what they are forking out for petrol and which station has the better deal for them.

I’m not complaining when the price of fuel is coming down and prices are revised a few times a month. But one thing to note about this dynamic change of fuel price: if it can be revised downwards a few times a month, it is also susceptible to upward revisions a few times a month when the price of oil goes up. And as per announced by the government, it can go as high up as RM2.70 per litre. Let’s hope we don’t get there anytime soon.

Meanwhile, enjoy Halloween and the lower price of petrol.

To read more personal finance and money related articles, visit Penny Sense.

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Gold was thought to be a perfect hedge against the stock market because it moves in opposite directions. Since the market came crashing down with the downfall of investment banks, this theory held true and the price of gold shot up almost immediately as Dow Jones slipped. However, we now see both the stock market and gold moving in tandem, both heading in the same direction.

There are two main reasons for gold being driven downwards. Firstly, gold and the US dollar have a negative correlation. The worldwide economic downturn has ironically cause the US dollar to appreciate as it is still the currency of choice in international trades. Whilst the market stocks up on the dollar, it becomes clear that it is a better investment tool than gold, thus the opposite directions taken between the two.

The other reason is due to the sudden influx of gold supply in the market. Many fund managers are increasingly needing to liquidate their investments to face massive investor redemptions. As such, there has been a lot of sell down of holdings in gold.

How then does the future of gold look like? Many analysts believe that over time, the US dollar will eventually face devaluation. And when this happens, the price of gold will see an uphill trend (remember that they are negatively correlated?). It is only a matter of time. If you subscribe to this theory, then this will be a good time for you to pick up gold and wait for the dollar to fall.

On the local front today, the price of gold has dropped to RM84.80 (buying price from Public Bank’s Gold Investment account). It remains to be seen if it will drop further, but it is as low as it gets for now.

To read more personal finance and money related articles, visit Penny Sense.

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Don’t you think amidst the global financial crisis over the weeks, our market has been very well maintained in terms of the slow slide on the exchange? It looks as if there was a magic hand sustaining the market and allowing it to drop only bit by bit. However, I didn’t think it could be sustained long enough as the rest of the world comes tumbling down with the fear of global recession hitting us. And so the final curtain comes down today, with the KLCI being at its lowest since June 2006, at 914.35 points this afternoon.

Crude oil price has also slide further to a shocking US$73.33 per barrel. Do we hear another drop in our local fuel price? I doubt so. Not right now anyway when it has just come down by RM0.15 just a couple days ago.

And how’s gold doing alongside the fall of everything else? It has also come down since last week’s high of around RM105 per gram to a mere RM97 per gram. Gold is supposedly a good hedge against the stock exchange because it is supposed to move in opposite directions.

But at the moment, everything is not seen to be moving upwards, so there really isn’t much of a hedge anymore. I’m not sure if gold will continue to slide with the market but if it does, it may not necessarily be a bad thing. It’s time to buy and buy some more. Same goes with the blue chips and fundamentally strong counters on the exchange.

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