Why invest in gold now: Pawnshop chain explains
MANILA, Philippines — The Philippines topped global gold sales in the first quarter of this year, but why are people so keen into buying gold?
Karlo Castro, President and Chief Executive Officer of pawnshop chain Palawan Group of Companies, shared some reasons why people are into the “gold rush.”
Gold value higher than bank interest
Gold, said Castro, is a way to secure your money and future from inflation.
“Just in a couple of months, the price of gold jumped to P304 per gram. Going back for two years, it’s about 50% na ‘yung price ng gold this year versus two years ago. And if you really go back in the past 20 years, it’s now about seven or eight times (higher). So P1,000 before is actually P8,000 now,” Castro explained at a recent Makati City press conference for their company’s launch of Palawan Gold bars and jewelry 2024 collection.
He gave as comparison the earnings one can get from banks versus from a gold investment.
“If you have P5,600 for example and you put it in a bank, ‘yung P5,600 na ‘yan, probably because of the inflation and everything, is still P5,600 next year but you’ll be able to purchase less as compared to last year. If you invest in gold, of course dapat hindi mawala ('yung gold), the gold price is, the trend is going up. It goes up and down, but the general trend is it’s really going up,” he explained.
“So if you have a spare P5600 and you put it in gold, probably next month, you will have P5,700 or P5,800.”
Sheila Shalduga, the company’s Chief Commercial Officer, confirmed that gold’s value did not depreciate “in the recent past.”
“Parang bumababa s’ya pero pakaunti-kaunti,” she said.
When the company launched their new gold bars collection last September or October, the price of gold has since hiked up to around P400 per gram, Castro said.
The company, said Shalduga, offers the lowest interest rate but higher appraisal value for pawned items, so customers could have more take-home cash.
Gold now more affordable
The first stumbling block why people are not investing in gold is the price, said Shalduga.
“Lalo na ‘yung younger people, may notion sila na mahal… In the past also, ang gold bars talagang bars kaya ang mamahal. So now, may sachet na, may tingi na, para it’s easily accessible to them,” she said.
Castro’s initial belief was that the young ones were not buying gold.
“But during the past few years… whenever we post our repurposed jewelry online, in a matter of two hours, sold-out lahat. When we do live-selling…in minutes, ubos kagad. So the interest is really there. They just have to find a company that they can trust because marami rin kasing scams online, ‘di ba?”
Bobby Castro, the company’s chairman, said it gives customers confidence if their gold comes from reputable sources. Their new gold bars and jewelry collection, he assured, went through quality checks that guarantee their 99.99% pure gold content and weight.
Related: Jewelry at the forefront of ‘revenge spending,’ expected to grow — pawnshop chain
Gold better gifts than toys, gadgets
According to Shalduga, instead of toys and gadgets, gold bars and jewelry are better gifting options because gold is easier to pawn in case of emergency.
“In times of need, ang pinakamabilis ay sangla, pwede mong isangla. And you just have to pay a minimal interest rate,” she opined.
“In fact, in some cultures, especially Chinese, they use this as a gift as ‘pinapasa-pasa,’ so this is something that we also want to teach our customers that when you talk about gold, it's not just something that you can wear. You can start buying this para as gift on special occasions rather than give gadgets or toys. Why not give gold? You know, it appreciates over time.”
Gold as good as cash anywhere in the world
According to Castro, if the gold is 24K or 99.99% pure, it is appraised as 99.99% pure gold anywhere in the world.
“It’s pretty much as good as cash,” he assured, and gold’s value is always “higher than what you spent” for it.
A 20-gram gold bar might look very small that it fits in a pocketable credit-card-size case that one can bring anywhere in the world, but its value is already P100,000 at the minimum, — an amount that is already as good as a car down payment when the need arises, said Castro.
It is quite hard to find gold bars in the Philippines, he noted, but not anymore because of their Palawan Gold bars, which they aim to offer in more of their over 3,300 Palawan Pawnshop branches nationwide from the initial select 600 branches. These can also now be bought online through the company's social media platforms.
He revealed that they are also now working on a safekeeping facility for gold.
Moreover, Shalduga bared their plans to introduce a buy back service – “But for it to work, you have to keep your gold for a time (so its value appreciates),” she advised.
“Sa Binondo may buy back but they buy it (gold) P1,000 less than the market price,” she said.
Through efforts like these, the company aspires to make gold more accessible to everyone.
“The hope of course is to give access to the Filipino to invest in gold,” said Castro. “The hope is that this will also teach them about saving and securing their future.”
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