HelloGold is an online application to help curb the spread of the coronavirus pandemic, as reports indicate people are either rushing to buy gold or rushing to sell them as prices get higher.
HelloGold came to Thailand, the sixth largest gold consumer in the world, in 2017. They now have 100,000 customers in three countries (Indonesia, Thailand and its base in Malaysia.) Around 16,000 of its customers are Thai citizens.
If you know how use a mobile application and can afford to invest, all you need is the mobile application, your Thai identification number and a minimum investment of 10 baht.
HelloGold has attracted Series A funding from various investors including Finlab, a joint venture between United Overseas Bank, the Singapore technology agency SGInnovate and the Silicon Valley-based 500 Startups venture firm.
How it works
The platform allows individuals to buy and sell investment-grade gold through a blockchain-enabled mobile application, starting at 10 baht.
According to HelloGold, customers are the only owners of the gold, no matter what happens in the market. Customers then have the option to either sell their gold savings for cash or get it in physical bars.
The gold is held by a vault operator in Singapore. Customers can choose to use their gold savings as collateral for short-term financing as well.
Gold demand
Robin Lee, co-founder of HelloGold, told Thai Enquirer that it is a no brainer that gold has been in demand since the outbreak began in January.
According to prices given by the Gold Traders Association, the buying price of a gold bar was at 21,600 baht per baht-weight for bullion on January 2. That price has now increased to 25,650 baht per bar as of April 22.
For ornaments with 96.5 per cent purity, the buying price has increased from 1,399 baht per gram or 21,208 baht per baht-weight to 1,661 baht per gram or 25,180 baht per baht-weight in that same period of time.
“We are talking about people liquidating all kinds of assets, including funds and gold, and the same thing happened during the Global Financial Crisis in 2008,” he said.
“In 2008, gold initially fell, but then 6 months later…gold just went up and went on a long bull run and I am going to guess that it will do the same this time around,” he added.
Lee was inspired to create the app during the Asian Financial Crisis in 1997 when he saw many families in Southeast Asia end up losing all their savings when their cash turned to useless paper. He was also the former chief financial officer at the World Gold Council between 2010 and 2014 and now he is encouraging to use his app to do their savings in gold instead.
According to Gold Research Center, the Gold Price Sentiment Index has increased by 0.63 per cent from 67.5 in March to 67.93 in April as the demand for gold amid the outbreak is still there.
However, the optimism for the three months index between April and June has decreased from 66.36 in the first quarter of 2020 to the current 62.11 points, reflecting the sentiment that the outbreak is resolving. With that comes the trend to sell for profit, which was what happened mid-April, the center said.
“Investors are still worried about the outbreak’s impact on the economy and even though gold is a safe haven asset, they were being sold to compensate the drop in equity markets all around the world,” they added in a statement last week.
A survey conducted to look into the demand of gold in April with a sample size of 293 individuals resulted in 37.54 per cent saying they do not want to buy the precious metal, 36.52 per cent saying they are not sure if they are going to buy gold at all, and 25.94 saying they are buying it this month.
The Gold Research Center said businesses expect the price of Gold Spot will be in the range US$1,580-$1,707 per ounce in April while a bar off gold with 96.5 per cent purity is expected to be in the range of 24,500-26,200 baht per baht-weight. This is based on the expectation that they will be trading in the range of 32.29-33.19 baht per greenback in April.
“My view of gold price now is that it would move in an upward direction because more and more people, particularly in this crisis, are going to want to have something that they know would keep its value and it is an asset that they can understand,” Lee said.
“What you will see in this crisis over the next few months is that everything will go south like it did in 2008 and gold will be the one thing that will pop up to negatively correlate everything and I am pretty bullish on gold over the next 12-24 months,” he added.
