GOLD & SILVER INSIDER’S REPORT Version 2.

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5 Things You Must Know to Profit from Precious Metals

http://ian-tai.com/ [email protected]

First, I would like to thank you for taking the time to read this e-book. By doing so, I believe you have a strong desire to achieve financial security in today’s uncertain economic conditions. Well, I have great news for you. This book is written to bring you closer into the mind of a gold and silver investor. You will discover what we are looking at, and be given the latest market updates, and more importantly, how you can profit from this precious metal boom without getting cheated, conned and swindled.

Here, I have summarized them into 5 main points which are the 5 basic things we need to know before investing into gold and silver. They are:

# 1: Hedge against Inflation In 1971, President Richard Nixon had taken the United States off the gold standard. Since then, the Dollar is no longer backed by gold. It becomes a fiat currency. A fiat currency is one that has no tangible value backing it. As the Dollar is the international reserve currency, all currencies around the world have become fiat currencies. That is the beginning of inflation. The US government is allowed to print as much money as they want as creating currency is no longer limited to its gold holdings. Since 1971, the US Money Supply had exploded, growing from US$ 743.1 Billion to US$ 10.3 Trillion in March 2006. This equals to 12.8 times the money supply in 1971.

US M3 Report (US$ Billion) 12,000.0 10,000.0 8,000.0 6,000.0 4,000.0 2,000.0 1959-Jan. 1961-Sep. 1964-May 1967-Jan. 1969-Sep. 1972-May 1975-Jan. 1977-Sep. 1980-May 1983-Jan. 1985-Sep. 1988-May 1991-Jan. 1993-Sep. 1996-May 1999-Jan. 2001-Sep. 2004-May

0.0

Source: Federal Reserve Starting in 2006, the Federal Reserve had decided to count how much money is circulating around the world. That means, we do not know how much money has been printed today. Obviously, with trillions in corporate bailouts, stimulus packages and quantitative easing measures introduced, the amount of money circulating today is substantial higher than US$ 10.3 Trillion in 2006. As a result, the Dollar has lost more than 90% of its value since 1971. With currencies depreciating in value, well-informed investors are making their timely switch, turning some currencies into real money which has tangible value like gold and silver. Within the local context, buying gold and silver is a great hedge against falling value of the Ringgit. To put it simply, if we ask ourselves the question below:

Ian Tai | Gold & Silver Insider’s Report Ver.2.0 (130730)

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What can RM 10,000 buy? Period

Gold (Oz)

Silver (Oz)

Oil (Barrel)

January 2001

9.95

564.0

101.4

May 2013

2.02

111.6

34.6

-79.7%

-80.1%

-65.9%

Depreciated By:

To explain, you can buy 9.95 Oz of gold with RM 10,000 in January 2001. The same RM 10,000 would only get as much as 2.02 Oz of gold in May 2013. This means, our Ringgit had dropped by 79.7% against gold. Compared with silver and oil, the value of our Ringgit had declined by 80.1% and 65.9% respectively.

Instead, if you invested RM 10,000 in gold in January 2001, your investment by May 2013 would be: Period May 2013 Appreciated By:

RM

Oil (Barrel)

49,290

170.5

+392.9%

+68.1%

Similarly, if you invested RM 10,000 in silver, your investment by May 2013 would be: Period May 2013 Appreciated By:

RM

Oil (Barrel)

49,464

174.7

+394.6%

+72.3%

If you noticed, the values for both gold and silver are moving in tandem with oil prices, one of the most essential commodities today. Therefore, holding gold and silver in the long term is a great way for us to preserve our “hard-earned money” from inflation.

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# 2: Rising Investment Demand Research had shown significant increase in investment demand for both gold and silver. Let us start with gold. With uncertain economic situations, private investors had added a total of 516.3 Million Oz of gold into their portfolio from 2000 to 2012. Central banks around the world had been net sellers of gold since 1989. This had caused gold prices to remain low throughout the 1990s. In the 2000s, governments had continued to dispose gold into the open market, slowing the growth of gold prices during the period. This had changed starting in 2010. The US subprime crisis had motivated central banks to start cashing in their Dollars for gold. In 2012, central banks have netted in 17.2 Million Oz of gold, the largest amount of gold intake in 50 years. The large gold intake in 2012 was mainly contributed by countries such as Brazil, Russia, Turkey, Iraq, Paraguay and Venezuela. This is a precaution measure undertaken in case of “currency crisis”.

Official Gold Transactions (Million Oz) 20 15 10 5 -5

1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

0 -10 -15 -20 -25

Source: CPM Group

Besides adding gold reserves, several nations are now beginning to repatriate their gold holdings from the Federal Reserves and Bank of England back to their homeland. Let us take a look at some excerpts from major publications:

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BBC News (November 26, 2011) “Chavez repatriates Venezuela’s foreign gold reserves” 1. Venezuela has received its first shipment of gold bars, after President Hugo Chavez ordered the repatriation of 85% of the country's bullion reserves. 2. President Chavez has explained the move as an act of sovereignty that will protect Venezuela's reserves from global economic turbulence. 3. Venezuela plans to bring home around 160 tonnes (5.14 Million Oz) of gold, worth more than US$ 11 Billion. International Business Times (February 1, 2012) “Venezuela Completes Repatriation of $9 Billion Worth of Gold Reserves” 1. In two months, we've brought 160 tonnes of gold valued at around US$9 billion back to Venezuela," Nelson Merentes, Central Bank President. “ 2. Mr. Merentes said 85% of Venezuela’s gold reserves are now held in the country’s central bank vaults.

Forbes (January 16, 2013) “Germany Repatriating Gold from New York and Paris “In Case of a Currency Crisis” 1. Bundesbank indicated they have no intention of selling gold, but acknowledged the move is “preemptive” in case a “currency crisis” hits the European Monetary Union. 2. Repatriating gold is a clear indication of public loss of confidence on foreign central banks and the integrity of the monetary union. 3. Over the past few years, Venezuela, Libya and Iran have also repatriated their gold holdings. 4. Bundesbank will be bringing 374 tonnes (12.0 Million Oz) of gold from Banque de France and 300 tonnes (9.6 Million Oz) held in the Federal Reserve, New York. At market prices, that’s about US$ 36 Billion worth of physical gold bars. According to Financial Times, it will be the biggest planned gold transport on record. 5. Germany’s gold repatriation raises questions as to their belief in both the strength of the global economy, the European Monetary Union, and their trust to fellow central banks.

The gold repatriation from both Venezuela and Germany has caused a growing list of nations to “follow the bandwagon”. This includes Mexico, Netherlands, Ecuador, and Switzerland. Even within the US, the state of Texas intends to transport its gold from New York back to its state.

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This means, the overall trust in the United States and the global monetary system has become weaker, thus, raising demand for gold holdings in the future. What about Silver? Personally, I believe the fundamentals for silver is better than gold. Unlike the yellow metal, silver has a wide range of commercial applications, heavily used in many industries such as photography, electronics, automobile, solar energy, medical and nanotechnology. From 1977 to 2012, our consumption for silver had exceeded its mine production by 7 Billion Oz. This had caused silver stocks to drop to around 300 – 400 Million Oz in 2012. This amount is dangerously low as it is less than our annual silver consumption of about 800 Million Oz. Due to excessive industrial usage for silver, there are more gold aboveground than silver for the 1st time in history. 3000 2500 Gold Bullion Stocks (Million Oz)

2000 1500

Silver Bullion Stocks (Million Oz)

1000 500 0 1990

2012

Source: CPM Group Despite having strong fundamentals, silver prices had remained artificially low because governments have been dumping their silver holdings into the market consistently. This continued until 2009 when governments have very little silver to sell in the market. Net sales by governments had dropped from 88.7 Million Oz in 2003 to only 7.4 Million Oz in 2012. As a result, governments have lost its significant grip on silver prices. Hence, in tandem with low government sales of silver, prices have started to climb rapidly in 2009.

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Net Government Sales of Silver (Million Oz) 100 90 80 70 60 50 40 30 20 10 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: World Silver Survey 2013

Silver Prices (US$ / Oz)

Dec-12

Jan-12

Feb-11

Mar-10

Apr-09

May-08

Jun-07

Jul-06

Aug-05

Sep-04

Oct-03

Nov-02

Dec-01

Jan-01

45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00

Source: Yahoo! Finance

Since then, investors started to buy silver as a cheaper alternative to gold. For the past 4 years, investors have pocketed in 566.6 Million Oz of silver into their investment portfolio. Hence, silver presents a good opportunity for us to capitalize on as it is still relatively new compared to gold.

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Global Silver Investment Demand (Million Oz) 200 150 100 50 0 -50

Source: Silver Institute

# 3: Struggling Mine Productions Unfortunately, mining productions could not satisfy increasing demand for both gold and silver. For instance, global demand for gold had jumped from 58.7 Million Oz in 1977 to 124.4 Million Oz in 2012, up by 111.9% in 35 years. Meanwhile, gold mining production had climbed from 44.2 Million Oz in 1977 to 85.8 Million in 1999. Since then, gold miners have struggled to maintain gold productions, experiencing a small decline to 79.4 Million Oz in 2012. Hence, this had caused the gap between gold demand and its supply to be wider. In 1977, the shortage was 14.5 Million Oz. By 2012, the amount had increased by 210% to 45 Million Oz.

Global Shortage in Supply from Gold Mining Productions (Million oz) 70.0 60.0 50.0 40.0 30.0 20.0 10.0 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

0.0

Source: CPM Group

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In the 20th century, most of the world’s gold production came from the “Big 4” nations. The Big 4 nations include South Africa, Australia, Canada and the United States. In 1983, the “Big 4 Nations” had produced 27.1 Million Oz of gold, accounting for 73.3% of the world’s gold production. During the 1980s and 1990s, their gold production had grown steadily, peaking at 43.0 Million Oz in 1997. However, since then, gold production had begun to struggle. It dropped to only 24.2 Million Oz in 2012. This accounted for only 27.9% of the world’s gold production.

Gold Production in "Big 4" Nations (Thousand oz) 50,000 40,000 30,000 20,000 10,000 2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

0

Source: CPM Group

The gold production decline in the Big 4 nations is offset by growing productions in new major gold producing regions. All of which are located in developing nations. They include:

1. Central Africa This region mainly includes Ghana and Tanzania. While these nations are blessed with abundance in gold, it is risky to have mining operations because of continuous civil wars, kidnapping, terrorism and political instabilities. Any of these undesirable circumstances would definitely sabotages gold mining operations within these nations. Hence, this makes investing in gold mining companies that have mining operations in Africa less desirable among conservative investors.

2. South America South America is currently the fastest growing gold producing region in the world. This is mostly contributed by rising production in Chile. Gold sales are usually priced in US Dollars. However, mining operations are expended using various local currencies where the mines are located. Most of the currencies in these nations are not widely traded in the international market, thus, may be subject to wild fluctuations in the future. As their values are not stable, there is a high degree of uncertainty in preparing budgets and evaluating a gold mining project in developing nations. Hence, once again, this would increase the Ian Tai | Gold & Silver Insider’s Report Ver.2.0 (130730)

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risk in investing in gold mining companies.

3. China China has overtaken South Africa as the largest gold producer in the world. China has been increasing their production capacity. In 2000, the country produced 5.1 Million Oz of gold. Starting in 2007, China had overtaken South Africa to become the biggest gold producing nation in the world. Unlike South Africa, China’s gold production continues to climb, produced 11.9 Million Oz of gold in 2012. This amounts to 13.7% of the world’s gold production in that year.

China's Gold Production (Million Oz)

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

14 12 10 8 6 4 2 0

Source: CPM Group

Despite being the largest producer, China is the 2nd largest consumer of gold in the world. The amount of China’s gold consumption had jumped from 7.6 Million Oz in 2000 to 26.8 Million Oz in 2012, up by 253.4%. This means, China’s gold demand had grown a lot faster than its increase in mining capacity. This had resulted in rising amount of gold shortages from 2.47 Million in 2000 to 14.86 Million in 2012. Hence, China had widened the gap between global gold demand and its supply.

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China's Shortage of Gold Supply (Thousand oz) 20,000 15,000 10,000 5,000

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

0

Source: CPM Group

As for silver, there is very little mining activity for the metal around the world. This is because silver prices have been kept artificially low. It is not profitable to operate silver mines. Therefore, most of the silver are produced as a by-product from gold, lead and zinc mines. Silver is sold into the market in order to reduce mining costs of these metals which are more profitable. Hence, we would not foresee a significant increase in silver production despite recent hike in silver prices. Thus, this would cause the present shortage in silver supply to persist in the future.

# 4: A Bull in China I believe China is going to play a major role in influencing gold and silver prices in the future. To understand better, we would take a look at the development of the Middle Kingdom’s gold and silver market since the end of World War 2 very briefly. During to Cultural Revolution, Chairman Mao forbids private individuals to own and trade both gold and silver in the nation. The main reason was to prevent gold and silver from flowing out of China. This policy was implemented from 1949 to 1982. As a result, China had missed out on the previous commodity cycle in 1980, when silver peaked @ US$ 50 / Oz. Starting in 1983, Deng Xiao Peng who stepped up as Chairman Mao’s successor had given the PBC the sole right and responsibility to regulate gold and silver related activities in China. This includes buying, selling, production, distribution, manufacturing and even setting its local prices. In the beginning of the 21st century, the Chinese precious metals market entered a new phase when PBC was deregulated from being a state monopoly that monopolizes its country’s gold and silver market. Mine producers and consumers are allowed to buy and sell gold and silver freely in China.

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With economic growth, China’s demand for gold and silver has been increasing rapidly. Presently, the Middle Kingdom is the: World’s No.2 in Gold Jewellery Sales World’s No.2 in Investment Demand for Gold World’s No.5 in Official Gold Holdings World’s No.9 in Proven Gold Reserves

As for silver, heavy investment in infrastructure, buildings and manufacturing capacities had resulted in significantly higher demand for many commodities. This includes silver. Hence, China’s industrial demand for silver had jumped from 67.1 Million Oz in 2002 to 159.5 Million Oz in 2011, up by 137.7% in 10 years. To fuel continuous growth in industrial demand, China had increased its silver imports into the country. Research shows that China’s silver imports had grown rapidly from 29.4 Million Oz in 2002 to 145 Million Oz in 2012, up by 393% in 10 years.

China's Silver Imports (Million Oz) 180 160 140 120 100 80 60 40 20 0

Source: Thomson Reuters GFMS

Moving forward, I believe China’s investment demand for both gold and silver will continue to grow rapidly, thus, causing its prices to go up in the future. This is because:

1. High Saving Rate The economic growth in China has contributed to rising affluence among its citizens. The Chinese are now making more money. Research shows that China’s GDP per Capita had risen from US$ 2,866 in 2003 to US$ 8,442 in 2012, up by 195% in 10 years. More importantly, the Chinese are thrifty as the nation has the highest saving rate in the world. Since 2006, China’s savings rate have maintained at 50 – 55% per annum. This means, for every Ian Tai | Gold & Silver Insider’s Report Ver.2.0 (130730)

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US$ 100 earned, the people are able to have at least US$ 50 in savings. This means, the Chinese has more money in hand to invest than any other parts around the world.

2. Inflation Worries Despite rising income and savings, China’s middle class is struggling to move ahead financially. This is because of inflation. They know that their savings today is going to worth lesser in the future. This is evident as China’s money supply is growing faster than its deposit rate. For instance, the amount of Yuan circulating had grown by 638%, up from 13.2 Trillion Yuan in 2000 to 97.4 Trillion in 2012. This worked out to a Compound Annual Growth Rate (CAGR) of 18.1% for the past 12 years.

China's M2 Report (Trillion Yuan) 120 100 80 60 40 20 2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

0

Source: People’s Bank of China The speed of money creation in China is 6 times faster compared to its current deposit rate of 3%. This encourages more people to seek for investments that could yield a much better returns in order to preserve the value of their hard-earned money.

3. Limited Investment Options With certain limitation in investing abroad, China is more inclined to invest within its country. However, the 2 most favoured investment vehicles among the Chinese have become less attractive recently.

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Shanghai Stock Exchange

Jun-12

Jul-11

Aug-10

Sep-09

Oct-08

Nov-07

Dec-06

Jan-06

Feb-05

Mar-04

Apr-03

May-02

Jun-01

Jul-00

7,000.00 6,000.00 5,000.00 4,000.00 3,000.00 2,000.00 1,000.00 0.00

Source: Yahoo! Finance First, the local stock market has been performing poorly. The Shanghai Stock Exchange (SSE) had crashed, dropping from 5,955 index points in October 2007 to 2,178 index points in April 2013. This equals to 63% decline in 5 – 6 years. Second, the property market has become less affordable among the working class in China. For example, here are some apartment prices in major cities across China. The data was updated by Global Property Guide in August 2011. They are:

City

Size (Square Feet)

Yuan

Beijing

810

2,936,609

Shanghai

810

1,429,392

Guangzhou

540

980,251

These are the smallest and the cheapest properties available for sale in these cities. Most of them are presently out of reach from the average Chinese people. The situation was worse as the Chinese officials had introduced some measures to cool off the property market in the country. Some of these measures include:

a. For 1st homebuyers, the down payment required had increased from 20% to 30%. This means, the down payment needed to buy a 540 square feet apartment in Guangzhou had jumped from 196,050 Yuan to 294,075 Yuan. Thus, buyers would need to save an additional 100,000 Yuan before being able to buy their houses. b. For 2nd homebuyers, the down payment required had jumped from 50% to 60%.

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c. If a local wants to buy his 3rd property, he has to pay cash. He would not be able to secure a loan for it. d. In Beijing, the official prohibits residential property purchases to people who have not lived within the province for 5 years. A local Beijing resident is allowed to buy and own 2 houses. Meanwhile, a non-Beijing resident is only allowed to have a house.

4. Huge Disposable Income Disposable Income is the amount available to spend and save after paying off income taxes and making pension contributions. Statistics show that China’s disposable income per capita had increased from US$ 1,024 in 2003 to US$ 3,943 in 2012, up by 281% in 10 years. Presently, China has a population of 1.34 Billion. This means, if we multiply US$ 3,943 with 1.34 Billion, the total amount of China’s disposable income for the year 2012 was US$ 5.28 Trillion.

China's Disposable Income per Capita (US$) 5000 4000 3000 2000 1000 0

Source: Bureau of Statistics, China

This amount is so huge that it dwarfs both the gold and silver market. For instance, a. In 2012, the global production for gold was 90.9 Million Oz. With average price of US$ 1,669 / Oz, the annual gold produced was roughly worth about US$ 151.7 Billion. b. Meanwhile, silver production worldwide was 787 Million Oz in 2012. With average price of US$ 31.15 / Oz, the total amount of silver produced was US$ 24.5 Billion.

Hence, China’s disposable income of US$ 5.28 Trillion has far exceeded the total value of worldwide gold and silver production of US$ 176.2 Billion in that year. In other words, China has enough money to buy up 30 times of gold and silver produced in 2012.

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With today’s lower prices, both gold and silver are even more appealing to Chinese investors. Thus, investment demand for precious metals in China had experienced significant increment as investors are now capitalizing on low prices. Hence, it is expected that both gold and silver investment to be strong in 2013.

# 5: How to Buy Gold & Silver? Let’s start with gold. Basically, there are 3 simple rules you can follow to buy gold without getting cheated. They are:

Rule No.1: Buy P.A.M.P Suisse Gold Bars Originated from Switzerland, P.A.M.P Suisse Gold Bars are highly appraised for its purity and quality in the international gold market. This brand is a “must carry” among gold brokers and jewellers in order to attract potential customers. It is widely recognized among gold buyers and sellers in the world. P.A.M.P Suisse Gold Bars are ideal for investors. This is because an investor could sell his bars to a different broker if his original broker has stopped doing business. This means, if you buy P.A.M.P from Tomei, you can choose to sell the bar back to Tomei or to a different broker such as nubex.com or even sell it to a foreign broker. Hence, you may choose the broker that gives you the best rate for your P.A.M.P products.

Note: When buying gold bars, please choose ones that are 20 grams and above. This is because they are cheaper than gold bars which weigh 1, 5 and 10 grams. To calculate, just take the price offered to you and divide it with the weight of the gold bar. For instance, if a 20 gram gold bar is priced @ RM 4,000, this equals to RM 200 / gram.

Why Not Locally Minted Bars & Coins? In general, there are 4 different brands of locally minted gold bars and coins. They are: a. b. c. d.

Poh Kong’s Bunga Raya Gold Bars Tomei Gold Bars Public Gold’s Gold Bars and Coins Bank Negara Malaysia’s Kijang Emas Gold Bars

Compared to P.A.M.P Suisse, these bars are not known in the international market. Therefore, most gold buyers would prefer an international brand like P.A.M.P over local gold products. If you buy a piece of Bunga Raya, you would most probably sell it back to Poh Kong. Ian Tai | Gold & Silver Insider’s Report Ver.2.0 (130730)

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This is because you will receive better rates for selling Bunga Raya back to them. If you sell your Bunga Raya to Tomei, they would offer you at a huge discounted rate which will cut your investment returns significantly. Hence, unlike P.A.M.P Suisse, the value of the Bunga Raya is more dependent on the network of Poh Kong’s jewelry stores in the country. As for Kijang Emas, you may have limited demand when you try to sell Kijang Emas. This is because you will most likely sell back Kijang Emas to Maybank or Bank Negara Malaysia. Therefore, although the Kijang Emas is our nation’s official gold coin, I would personally recommend it is not widely accepted among gold investors.

How About Gold Passbook Accounts? Gold passbook accounts have become the new wave for investing in gold. You may choose to open a gold account in Maybank, CIMB or Public Bank. It is a convenient way to capitalize on gold prices as investors do not need to deal with gold physically. All transactions are recorded in your passbook given by your chosen bank. Personally, I would prefer holding a P.A.M.P Suisse Gold Bar than a passbook. This is because the terms and conditions of a passbook would change over time and these changes may not be in favour to investors. For example, when Maybank launched first its gold account, investors can choose to make withdrawals in the form of cash or receive a gold bar. Today, you would not receive a gold bar from Maybank. The bank had already changed its terms. In fact, I believe a gold account is more like you giving “Free-Financing” to banks. The banks take money from you to run its daily operations without needing to pay you any interest like a saving accounts and fixed deposits. Since gold is a long term investment, account holders would be expected to hold onto the account for a long time. That means you are helping the banks to save millions of dollars in monthly interest payments, thus, providing cash flows to bankers. As a result, banks have gotten richer while you may not if gold prices fall.

Rule No.2: Buy-Sell Margin As gold investors, we should purchase gold that is closest to its current international market prices. Usually, gold brokers would sell gold at a premium slightly beyond the current market price while buying back from you at a lower price. The difference between what you pay and what you sell is called the buy-sell margin. Generally, the ideal buy-sell margin should be around 5 – 10%. This means, if you buy gold @ RM 150 / gram, you should expect the same gold to be sold back @ prices between RM 135 – RM 140 / gram on the same day.

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Presently, jewellers like Poh Kong and Tomei would sell gold bars at higher rates compared to Public Gold and other brokers which are catered specifically for gold investors. Thus, their buy-sell margin is usually higher, eroding your investment returns on your gold purchase. However, it is important to do your homework and find yourself a suitable broker that is trustworthy before making your first purchase on gold. That is why Rule No.3 is essential for your investment success in gold.

Rule No.3: Find Trustworthy Brokers A trustworthy broker would have the following criteria:

No.1: Keep it Simple Gold investment should be kept simple. You should deal with brokers that only buy and sell physical gold products. Avoid those which try to sell you “innovative” kind of gold investment. Stick to the basics as all of these “innovation” are unnecessary. Ideally, the transaction is like this. You receive your gold bar upon making payments. No contracts are needed to be signed.

No.2: States its Buy-Sell Prices A trustworthy broker is one that states both buying and selling prices to its customers. This information is usually published in their website or their outlets. Having both buying and selling prices is convenient as we would know exactly how much to expect if we sell our gold in a period of time. This would help us to decide which broker is more competitive and offers us the best buying and selling rates for their gold products. Also, you may want to take note how efficient transactions are made. Some questions you may ask include: a. Can I walk-in to buy & sell gold? b. How long does it take to deposit money into your account? c. How long does it take to deliver my gold purchases? Brokers that are secretive over their buying prices (their buy-back prices) will add inconveniences and uncertainty to investors. This is because you would not know exactly what your gold products are worth at a certain point of time. Some brokers may suggest you calling their office to check out the latest price. Forget it as there are many other local brokers which offer better customer services to you.

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No.3: How to tell that your gold products are real? The best way to check the authenticity of gold is by measuring its density. The density for pure gold is 19.3 g/ml. First, we weigh the piece of gold. Then, we fill a vial that has millimetre markings on the side with water. Take down the 1st water measurement. Next, we would take the 2nd water measurement after putting the piece of gold into the vial. Calculate the difference between the 1st and 2nd water level in millimetres. Density of gold could then be calculated by using this formula:

Density = Weight / Volume of Water Displacement

For instance, let us say that we have a gold piece that weighs 50 grams. After dropping it into the vial, we found that the volume of water displaced is 2.6 millimetres. Using the formula, we would get a density measurement of 19.3 g/ml. Thus, we can verify that the gold piece is most likely real. If the density is substantial above or below 19.3 g/ml, then, the piece could have been contaminated with other substances or could be a different substance. If you sell your gold bars back to your broker, they would first verify its authenticity before offering you a price of your gold and accept it. Hence, it is wise for you to return the favour by asking them to perform the same test. It is a plus point for a broker that is willing to perform a test to verify the authenticity of its gold products with your presence. That way, you can be rest assured that your gold purchase is truly authentic.

As for silver, here’s what you can do to find yourself the best deal in the country. Step 1: Check silver spot prices @ kitco.com. For example, silver is trading @ US$ 22.57 / Oz. With exchange rate of RM 3.00 per US Dollar, silver is trading @ a. RM 68.61 / Oz b. RM 2.21 / Gram Step 2: The best deal you can find is one that is “closest” to the spot price calculated which are RM 2.21 / gram. For example, if a broker sells silver @ RM 2,774 / kg, this worked out to be RM 2.77 / gram. The broker is selling @ a premium of 25% above the spot price. Then, you repeat the same calculation with the next broker and choose the one with the most competitive prices. Here, I would provide you with a list of products you can buy: Products: 1. Canadian Maple Leaf Coins Ian Tai | Gold & Silver Insider’s Report Ver.2.0 (130730)

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2. 3. 4. 5. 6. 7. 8. 9. 10.

US Silver Eagle Coins Variety of Australian Silver Coins (Australian Kuala Silver Coins) A-Mark Silver Bars Scottsdale Silver Bars Pamp Suisse Silver Bars Public Silver Bars Valcambi Silver Bars Johnson Matthey Silver Bars Sunshine Minting Silver Bars

Step 3: Next, you check the website of a silver broker for its buying and selling prices. The selling price is what you will pay for your silver purchase. Meanwhile, the buying price is what your broker would pay you when you sell silver to them. Usually, the selling price is higher than the buying price. The difference is called the buy-sell margin which is what the broker earns from trading silver. Personally, I prefer brokers that publish both buying and selling prices. There are brokers which only show their selling prices and keep buying prices undisclosed on their website. Some brokers may insist investors to call their office for their buying prices. Brokers with undisclosed buying prices are less transparent and less consumer-friendly. This is because investors could not check their value of their silver purchase on the daily basis conveniently online. For instance, the broker who quoted RM 2,774 / kg is willing to buy-back its products @ RM 2,441 / kg. This means, the buy-sell margin equals to about 12%. Here’s the calculation: (RM 2,774 – RM 2,441) / RM 2,774 X 100% = 12% The lower a broker’s buy-sell margin, the more competitive he is in the silver trading industry, hence, deserving your business. Several places where you can buy silver are as followed: a. b. c. d. e. f.

Nubex.com Silvermalaysia.com PublicGold.com 1 Stop Gold Mybulliontrade.com Cycle & Trend Marketing

Ian Tai | Gold & Silver Insider’s Report Ver.2.0 (130730)

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More Valuable than Gold & Silver Unfortunately, as gold and silver increase popularity, most people are still in the dark when it comes to capitalizing on this investment opportunity. As a result, many risk losing money investing in precious metals, investments that potentially could increase their wealth. In turbulent times, I believe it is not investing in stocks, properties, gold and silver that make us rich. Instead, in the “Information age”, it is information, knowledge, wisdom, and know-how of stocks, properties, gold and silver that makes one wealthy. In order words, your financial IQ is the one that would determine your financial success. What you know about gold and silver is “the key” to your investment success, thus, making it more valuable than gold and silver itself. Here are some channels to learn more about Gold & Silver: 1. Ian-tai.com Ian-tai.com is a Gold & Silver Investment Blog which aims to be the preferred source of news, information, market updates and independent insights on investing in precious metals in Malaysia. The blog covers a variety of related subjects such as the US economy, the European Debt Crisis, Gold & Silver Mining Industries, Investment Market & Sentiments, and most importantly, how fellow Malaysians can benefit from Gold & Silver.

2. “Gold” and “Silver: Updated” Books Filled with detailed explanations, both books offer a no-nonsense guide about how you can profit from gold and silver investments. These books, which provide insights from an investor’s “Point-ofView”, is currently available in bookstores such as POPULAR, MPH, Borders and Kinokuniya in both Malaysia and Singapore.

3. The Gold & Silver Investment Workshop The Gold & Silver Investment Workshop is an exciting workshop that provides intensive “hands-on” training on both the fundamental and technical aspects of investing in precious metals. Participants would be given detailed analysis on both the international gold and silver market and receive “stepby-step” guidance on determining market timing and on the process of buying and selling gold and silver from local brokers and dealers in Malaysia. To find more details about our next intake, please feel free to: a. log onto “Ian-tai.com” or b. email me @ [email protected]

Ian Tai | Gold & Silver Insider’s Report Ver.2.0 (130730)

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Thank You! Sincerely from, Ian Tai Gold & Silver Investor Author of Best-Selling Books “Gold” and “Silver: Updated”

Ian Tai | Gold & Silver Insider’s Report Ver.2.0 (130730)

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