Gold update - 24 September

Gold is still going strong - with the price topping out at USD$739 on Friday.
It came back a touch on profit-taking towards the end of trading - but is still over the $730 mark.

The general expectation is for a period of profit-taking* and consolidation in the short term but overall the expectation is for higher prices in the future.

"On the charts gold has moved back into overbought territory and may benefit from a period of consolidation.

"However, the absence of any significant resistance levels means that gold is in uncharted territory and making its own history," James Moore at TheBulliondesk.com said.

The NZD is on the up again sitting around the 0.74 mark for the last few days. It is in a similar position to gold, where it’s a little overbought at the moment and we are currently waiting to see which way it is likely to move, but given the strengthening carry trades, it could be either direction yet. If it drops expect to see quite strong price increases in gold in NZD, as the current exchange rate position is helping to take the edge of the higher gold prices.

Current gold price drivers:
• US economy: ask anyone and they’ll have some information or an anecdote about the US economy, and where it’s heading. It’s not looking so hot at the moment, but it’s definitely not the only factor in the gold price at the moment.
• Flight from risk: There is a large movement away from high risk high return investments - towards more safe-haven investing, and protection against uncertain geo-political risk
• End of the Central bank sales for this year: Total gold sold this year - between 441 and 460 tonnes. With the ECB sales finished the price suppression pressures will ease.
• Performance: from http://www.marketoracle.co.uk/Article2209.html
Gold is one of the top performing assets of recent years and has risen 16% so far in 2007 and is on course for its seventh straight annual gain.
So far this quarter gold has rallied 13.6% in USD, from $648 to $736 USD.
So far this quarter gold has rallied 13.2% in GBP, from £323 GBP to £365.50 GBP.
So far this quarter gold has rallied 9.4% in EUR, from €479 EUR to €524 EUR.
• Oil – Oil is currently sitting at inflation adjusted highs, with supply unable to keep pace with demand. Gold is used to hedge against high oil prices.

All in all things are looking very good for a bright and shiny future (sorry about the pun) for Gold as a good safe-haven investment.


NEWS: 2007 American Eagle gold coin sales suspended

* Profit-taking = Where investors sell to take a quick profit (or liquidity) on the high, which drops the price, which then leads to more people investing with the lower price (hence the saw tooth look to the gold price on a daily basis).

Gold Price info - 14 September

Gold has spent the week consolidating above the US$700 mark and the future is looking quite strong for further growth.

It spiked to USD$715 earlier in the week and has moved down to $708 currently on a slightly stonger US Dollar, profit taking and consolidation.

Current short term effects on the price:

Oil - record highs on the oil price are helping to strengthen the current position. As you can see shortages due to weather ad the middle east, coupled with depleted gasoline stocks in the US and the end of the "driving season (also known as summer) coupled with the onset of winter and a huge demand for heating oil means that oil is unlikely to drop in price by much. Gold is used as a hedge against rising oil prices.

Foreign exchange: The US dollar hit 15 year lows against the major currencies earlier this week, and a 30 year low against the Canadian dollar on Thursday. The expectation of this improving in the short term is very slim. Reasons behind the US dollar being so weak are things like very low payroll data, a possible increase in the CPI, high Oil prices, the credit crunch and a lot of people believe running a fiat economy for 30 years will eventually catch up with you.

Risk Aversion: The credit crisis is now starting to bite world wide, with the 5th largest mortgage lender in Britain applying for financial aid from the Bank of England , and possibly another Finance company in New Zealand showing signs of trouble, more and more people are getting out of the high risk sectors of the investment markets and moving towards safe haven investments.

Gold supply: With the Indian wedding season just around the corner (November to December) and Newcrest buying out its entire forward position to trade only in Spot Gold (Next weeks announcement of a possible interest rate drop
will also help bolster the upward movement of the gold price.

NZD: has moved slightly upwards this week, this has taken some of the edge off the US$ Gold price. After the announcement of no rate change on Thursday by the reserve bank, the appeal of the Kiwi dollar once again meant an upward move against the US dollar.

Gold Price info - 10 September

Gold has broken through the USD$700 mark again. with more issues around the US dollar ( 15 year low against major currencies, an increased pressue on the US Federal reserve to drop interest rates , further weakening the US dollar) and a bullish feel coming back into the market further enhancing investment levels. Once again we appear to be seeing the downline fallout from Subprime lending and the forecast problems yet to hit.

With the upcoming Indian wedding season , we would expect to see the demand for physical Gold to increase dramatically ( as it does each year ) but especially as this year appears to have been a prosperous year for one of the largest consumers of gold.

Oil is again above US$76 which is also helping to bolster gold prices, with Gold historically increasing in price as the Oil price rises.

This should be a very busy week, and the expectation is for some solid gains in the Gold price going forward,

Ok, not too sure about you but this is beyond me - I look better with wrinkles :)

Gold price info - Update 03 September

Sorry for the delay, another very busy week at the Mint.

Another Finance company in trouble in New Zealand, lots of information available regarding the reasons why we are experiencing these issues both locally and internationally, so I won't spend too much time going over it again.
Suffice to say that Gold is again going through a resurgence as an alternative investment option for strengthening a portfolio, because of the potential growth in the gold price, and also as a hedge against the exchange rate.

We are currently at a 3 week high in the gold price, with strong sentiment during the US holiday ( Labour day) and support in the Asian and European markets. A rise in the oil price on Friday night due to another Cyclone in the Carribean causing concern about the oil platforms in that area has also helped raise the price of gold on the international market.

An earth tremor at the Gold Fields mine ( the largest Gold mine in South Africa) with one person possibly still missing, and a strike at the Lihir Mine in Papua New Guinea have also added to the current movement. Couple this reduction in supply with the announcement that the demand for Gold in India may increase by up to 50% this year and the strength behind the gold price looks like it will continue upward.

Historic find in Mongolia - with only the second Gold artifact uncovered in the homeland of Genghis Khan