Some people ask me, why does spread exist? Let me share with you ⤵️

What is Spread?

The spread refers to the difference between the buy price (when you purchase gold) and the sell price (when you sell gold). For example, if the buy price for 1g of gold is RM410 and the sell price is RM379, the spread is RM31 or 7.5%.

Why Does Spread Exist?

The spread compensates gold dealers for operational costs, including storage, certification, and logistics. It’s a common practice in all industries, just like banks have fees or stockbrokers charge commissions.

Why is Public Gold’s Spread Better?

Public Gold offers a spread of around 6-10%, depending on the gold product, which is more competitive than other brands or banks. Some banks or gold retailers might have spreads of 15-20%, significantly reducing your profit margins when selling gold.

Comparison with Bank Savings

When you save money in a bank, the returns are often lower, with savings accounts providing 1-2% annual interest. Inflation, typically around 2-3% per year, erodes your purchasing power, meaning your money loses value over time.

Gold, on the other hand, not only protects your wealth from inflation but also provides a hedge against currency depreciation. For example, mine, 53.55% increase in 4 years is a return of 13.39% per annum, significantly outpacing inflation and bank savings.

Key Takeaway

Even after accounting for Public Gold’s spread (e.g., 7.5%), the net profit (e.g., 5.89% annually in my case) is still substantial compared to traditional bank savings. Plus, gold’s intrinsic value and inflation protection make it a reliable long-term investment.

#PG1M