Talkshow with Lolita Setyawati:"Buy or Sell? Right Gold Investing in Q2"
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00:00 Yes, let's talk about whether or not we can invest in gold, especially as the price has decreased because
00:07 gold previously had continued to break new all-time highs in recent weeks.
00:11 However, that sentiment apparently has cooled down at least for the start of the week.
00:17 The price of gold fell by 2% on Monday. There you go.
00:26 Yes, folks, spot gold prices fell by 2.5% to reach
00:31 US$2,330.51 per ounce at 1.52 p.m. Eastern Time on Monday.
00:41 This marked the largest intraday drop in over a year.
00:45 Meanwhile, Comex Gold futures fell by 2.8% to settle
00:52 US$1,446.04 an ounce at the closing on Monday.
00:56 This is around 3.5% lower than its last record high price of
01:01 US$2,431.00.
01:18 Political tensions, including between Iran and Israel, had been boosting demand for safe haven assets.
01:24 Last Friday, an explosion struck a base in Iraq
01:28 belonging to Iran-allied militias, of which Iraq blamed Israel for.
01:33 Despite this, some experts believe that Israel would unlikely enter into a deeper conflict with Iran, as they are still
01:42 embroiled in their war on Gaza in conflict with Hezbollah.
01:47 "If Israel wants to continue its direct military operations against Iran, and wants to enter into a military phase against Iran, which I know is unlikely to happen,
02:01 as a result of the war on Gaza that has been going on for seven months, and is still not the desired result that Israel has been waiting for, the war on Hezbollah continues."
02:15 To delve more into gold prices, and when is the right time to invest in it,
02:19 we have today Lolita Satyawati, a certified financial planner and
02:24 registered Islamic financial associate. So, good morning Lolita. Good morning. Yes, thank you for coming to the studio and sharing with us.
02:33 Yes, let's get to it. Yes.
02:37 Everyone's waiting for this. Exactly. So,
02:40 the gold price
02:44 before the fall
02:46 was crazy, right Lolita? In a way, it was like super, super high, and then suddenly Monday it fell by 2%.
02:53 My first question is, is it time to invest? Oh, yes.
02:59 For gold price, the best time for invest is, I think, is anytime.
03:05 Maybe I would like to explain first the cause of this
03:09 increase. Yes. So, gold is a very limited resource, right? Yeah. The same as land. Yeah. So, on the other hand,
03:16 world population is increasing. Therefore, it is demand and supply principle. Yes.
03:21 Gold supply is limited while the demand is increasing. Another cause is the political and economic
03:27 uncertainty. Correct. Due to crisis, pandemic, geopolitics, and etc.
03:32 So, people are afraid that this uncertainty will lead to worse situation,
03:38 and they need to save their asset by buying a type of asset that is qualified as safe haven.
03:44 Gold value, as we know, is stable. It can be like a defense device from inflation and deflation.
03:51 Right. That's gold. Yes, true. And inflation itself is hand in hand with interest rate
03:57 playing a role in increasing gold prices. When the central bank decides to cut down the interest rate,
04:05 people tend to buy more gold because keeping asset in fiat money such as US dollar, for example,
04:12 is no longer promising. Really? Yeah. How come is it not promising? Yeah, because the lower rate of interest.
04:18 Right. So, people, you know, like if they save it in
04:23 fiat money, they will get lower return. Right. The last one is... That's not the case with gold.
04:29 Correct. The last one is US dollar compared to rupiah.
04:33 Yeah. So, nowadays, the US dollar is increasing. Very high. World gold price?
04:40 Yes. It's 16,200. 16,000? Yeah.
04:46 Of the highest it's been. Oh my goodness.
04:50 Well, world gold price is set by US dollar, right? Yes. So, when the US dollar rate increases,
04:56 gold price in rupiah will increase also. Right.
04:59 So, no wonder, yeah, because all of these are happening right now. Yeah.
05:04 So, the gold price is experiencing a rally nowadays.
05:08 So, is it... So, again, back to my question, because, you know, when there is actually a fall in the price,
05:15 usually people tend to buy, right? Would now be the right time to buy or invest in gold?
05:23 Yeah. In Indonesia, it's different. Right.
05:27 From international market. Domestic demand in Indonesia specifically depends on momentum.
05:33 So, the highest demand usually happens before and during Ramadan and before the end of the year.
05:41 Because most people tend to buy gold jewelry, you know.
05:45 Oh, during Ramadan and the end of the year. Yeah.
05:47 Because of the... Is it because of the THR money or...
05:49 Yes, some of it because of that.
05:52 THR money. That's good.
05:53 Yeah. So, during other times, especially when gold price increases significantly, like nowadays,
05:59 people are hesitating to buy more.
06:01 Yeah, correct.
06:02 Yeah, because they maybe try to wait and see, perhaps hoping the price would go down a little bit.
06:10 Yes, which... And start collecting when it happens.
06:13 Yes. Yes.
06:15 So, we kind of hoping it will go down a little bit, then we will start collecting again, accumulating again.
06:22 Yeah. And from the portfolio of our investment overall, how many percent should we or...
06:30 There's no really shoulds, right?
06:32 How many percent can we invest in gold, do you think? What's the wise percentage, do you think?
06:38 The wise percentage, I think it's around 15% of your total assets.
06:45 I see. Yeah.
06:46 Right.
06:46 That's pretty high.
06:47 Maybe the lowest will be 10%.
06:50 The lowest is 10%?
06:51 Yeah, 10%.
06:51 So, your total assets meaning a cool money or is it including money that you will use as well?
06:58 All our investment assets.
07:00 Right.
07:01 Yes. So, including emergency fund.
07:04 Including?
07:05 All the cash and cash investment.
07:08 Okay.
07:09 This is like a preferable financial decision, while the other 85%, maybe you can put it in diversified investment instruments.
07:17 Yes.
07:18 Something like that.
07:19 Right. So, in your prediction, what do you think is going to be the potential of gold prices in this quarter 2 of this year?
07:29 Well, actually no one can predict gold price move accurately.
07:36 Just by experience.
07:38 Yeah. Okay.
07:39 Many analysts said that there is a high opportunity that gold price will increase due to many aspects.
07:46 Such as the US monetary policy, geopolitical situation in the Middle East, general election in some big countries that happening.
07:55 Yeah, America is going to have bears.
07:57 Yeah. And also some central bank's policy to buy back gold.
08:00 Right. I think that's also very important.
08:03 So, this is maybe why accumulating gold is very preferable.
08:06 Right now, gold price is around, how much is this? Maybe US$2,300.
08:12 Yes.
08:13 It is predicted that gold price will likely, most likely will reach US$2,400 to US$2,500 before the end of 2024.
08:23 Seriously?
08:24 So, another 5% to 10% increase?
08:27 Some experts predicted like that.
08:29 So, maybe it's better to keep instead of selling it, and then wait for the right moment to sell when it's even higher than now.
08:39 But if you want to sell it, right?
08:41 If you want to sell it, yes.
08:42 If you want to buy it.
08:43 In my opinion, when you have financial goals, it's okay if you want to sell it right now.
08:50 But if you do not have financial goals, just keep it in the long term.
08:56 I agree.
08:57 Let's say you have more than 5 years long term goals, so it's better if you go buy it little by little, dollar cost averaging.
09:06 Maybe, for example, if you can save some money to buy 1 gram of gold each month, then just buy it regardless of the price.
09:16 Right.
09:17 So, in that way, you have an average rate of the prices of gold.
09:23 Yes.
09:24 Right now, you can go average up, and then if it goes down, you can do average down.
09:29 Yes.
09:30 It's called dollar cost averaging.
09:32 Dollar cost averaging method.
09:34 Right.
09:35 How do you see the global demand for gold and also the demand for gold in the domestic market?
09:40 Okay, in global demand, I think because of the global situation is still in uncertain condition.
09:46 So, I would say the global demand is pretty high.
09:49 Okay.
09:50 Well, in the domestic demand, it's like what I explained before, depends on the momentum.
09:56 Ramadan and end of year because of THF.
10:01 Usually, it happens that way.
10:03 Same as beef prices as well and bawang merah prices.
10:08 And rice prices and oil prices.
10:10 And poultry, right?
10:12 Commodity, yeah, you're right.
10:14 So, do you see a significant demand for gold in a domestic market here in Indonesia?
10:20 It's especially favorable for Indonesian women, right?
10:27 Really?
10:28 Why women?
10:29 I love gold in any kind of shape and I'm sure you too.
10:33 I actually have not invested in gold.
10:36 Oh, really?
10:37 No, because I feel I was actually waiting for that moment like probably most people as well when they want to invest in gold
10:44 because the price is so high at the moment compared to probably back in 2018 or 2019.
10:48 So, you're hesitated, right?
10:49 Exactly, because I feel like, whoa, if I buy it now per gram, it's super expensive compared to 2018 or 2019
10:57 which at that time was probably around 600,000 or 800,000, right?
11:01 Yes, and then it goes up during the pandemic to 1 million.
11:05 Yes.
11:06 And then it goes down again for 800.
11:08 Yeah, and then it goes up to 1.3 which is like, whoa, it's quite steep for me.
11:13 So, I have not invested but maybe I will consider, maybe about 8%.
11:19 I have an experience to share because I've been shopping for gold a few months ago.
11:26 Right.
11:27 And then…
11:28 In gold bar, ships, or other ships?
11:30 No, I was looking for a wedding ring.
11:32 Oh, okay.
11:33 But in the process, I found these ladies in the gold market in Jakarta and also in the pasar.
11:41 Everyone is, you're right, most of them are actually women because with gold, you can wear it, right?
11:48 Correct.
11:49 With stocks, it's just numbers and data.
11:52 And with gold, they don't probably know that it's investing but it's just a way of saving and also…
11:58 Looking good.
11:59 Yeah, looking good.
12:00 Exactly.
12:01 That's great.
12:03 Well, it is pretty easy to buy and very liquid.
12:06 You can sell it anytime you want, right?
12:08 That's correct.
12:09 In my opinion, if you plan to keep the gold for a long term, maybe more than five years,
12:14 either in gold bars or jewelry, it's…
12:17 Jewelry is also…
12:18 Jewelry is also okay, right?
12:19 It's okay but when you sell it, you will lose some expense, you know?
12:25 Yeah? How?
12:26 Usually, it's between 20 to 30%.
12:29 That's great.
12:30 Oh, wow. That's a lot.
12:31 But if the gold price, world gold price increase, so the jewelry gold also increase.
12:37 Okay, that's a…
12:39 No worries. If you keep it for a long term, you don't have to worry.
12:42 And long term is…
12:43 More than five years.
12:45 More than five years.
12:46 Or if you can just put it there for 20 years, that's also good.
12:50 Yeah.
12:51 For your children's fun, Archie.
12:53 For everything. For business, for…
12:56 Exactly.
12:57 20 years with gold, I think you'll be pretty safe.
12:59 Yes.
13:00 Yes.
13:01 Safe haven after all.
13:02 It is.
13:03 So, if we want to invest in gold, what sort of things do we need to find out first before investing in gold, Mba Lolita?
13:12 Okay, you have to know your portfolio first.
13:17 Okay.
13:18 Your asset.
13:19 If a company usually make a balance sheet, you can also make your own balance sheet.
13:27 Got it.
13:28 Just write down all your assets and your debt.
13:31 Yeah.
13:32 So, from your asset list, you can see which one is the fixed asset or another cash asset.
13:42 And then you can just count it.
13:45 Usually, for financial planner, we will advise for 10 to 15% of total asset in gold.
13:51 Right.
13:52 So, you just can…
13:53 As one.
13:54 You just can use gold for…
13:55 Regardless of the price and also your risk profile.
14:03 Usually, people with risk profile conservative or moderate, it's much better to put more gold and other conservative investment.
14:13 Right.
14:14 Yes.
14:15 So, gold is one of the options.
14:16 Less volatile.
14:17 Actually, gold is not an investment.
14:20 Oh.
14:21 Some financial experts think about that.
14:24 Because when you buy gold, you don't get return periodically.
14:31 Correct.
14:32 This is what you were talking about earlier, Archie.
14:35 I mean, for Archie, gold is not that interesting because the interest, you can't immediately feel it.
14:42 It doesn't…
14:43 Right?
14:44 The return, you can't immediately feel it.
14:45 True.
14:46 It's a bit boring for me.
14:47 Just to save.
14:49 It's just to save your assets so it will defend yourself from inflation.
14:55 Yeah.
14:56 And that's it.
14:57 That's it.
14:58 Right.
14:59 But it's a good instrument if you want to put it as an emergency fund.
15:03 Oh, really?
15:04 Yes.
15:05 Because it's liquid.
15:06 Yes.
15:07 But maybe only 25% to 30% of all your emergency fund.
15:09 Okay.
15:10 Because of the fluctuation.
15:11 I'm afraid if you buy it in the highest price, you know, like 1.3 and then when you need it, you have to sell it at 1 million.
15:18 Yeah.
15:19 Okay.
15:20 Yeah, that's a loss.
15:21 Yeah, right.
15:22 Yeah.
15:23 Okay, only 25% of your emergency fund.
15:25 And then what else?
15:26 Yes, and then what else?
15:27 And then maybe for people with a risk appetite, like kind of conservative and moderate, for
15:35 middle or long term financial goals.
15:38 Yes.
15:39 Such as maybe education fund.
15:41 Yeah.
15:42 Yeah, education fund, retirement fund.
15:44 Yeah.
15:45 And then also that kind of expanded.
15:48 It's very, very important, very urgent.
15:52 Yes.
15:53 That you want to be sure that in the long term, in the future, the price will stay steady
15:59 or stable, relatively to inflation.
16:03 Okay, one last question.
16:04 Do you think this price hike is going to continue in gold?
16:10 I think so.
16:12 Okay, so it's never going to crash?
16:14 No.
16:15 Gold is never going to crash.
16:16 Never going to crash.
16:17 But maybe it will go down temporarily, like right now.
16:20 Yes.
16:21 Because the situation is kind of a little bit stable, right?
16:24 Yes.
16:25 But it will go up again.
16:26 So it will keep going up.
16:27 Yes.
16:28 Okay, fine then.
16:29 Okay, I'm going to start investing in gold in the long term.
16:31 That's the conclusion for today.
16:33 That is the conclusion for today.
16:34 Well, thank you so much, Lolita, for sharing with us.
16:37 Yes, thank you so much, Madhulika.
16:39 My pleasure.
16:40 We are set for another commercial break and we're going to invest in gold.
16:44 We'll bring you the world headlines after this.
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