Gold bar at an inflated value

My friend asked me about investing in gold bars 3 months ago. I advised him to avoid it, as I do not understand how it worked. He had already invested, but did not tell me at that time. He told me today that the company that promoted the label "TGL" did not honor their promise to buy back the gold bar at the invested value and had since ceased operation.

He is now stuck with the gold bar which has depreciated by about 15% in value, compared to his original investment. He had since learned that he had paid for for the gold bar at a price that was higher that its market value. The person who had sold the gold bar to him, being a friend, was also not aware about the inflated price and had also invested a lot of her own money.

I recall another case about a lady who was quite keen to invest in 2 kg of gold bar at $140,000. She sought my advice, I asked her to calculate the value of the gold bar by converting from kg to ounces, apply the world price expressed in USD in ounce and convert to SGD. She found that she would have lost nearly 20% of the invested sum, as the gold bar was priced at an inflated price. She decided not to invest in the gold bar. I must have saved her at least $20,000, by avoiding this bad investment.

I had asked her to make a donation to FISCA in return for my advice, if she found it to be valuable. Perhaps, she felt that my advice was not worth while so she did not make any donation. I am not able to recall who she was.

Tan Kin Lian

Here are my past blogs on investing in gold bars:
http://tankinlian.blogspot.com/search?q=gold+bar
http://tankinlian.com/admin/file.aspx?id=186