Gold update 27 March

Gold dropped from historic highs over the past week and now sits at US$954-955 an ounce.

Gold bottomed out at US$905 last Friday before recovering to its present level. The drop was mainly due to large profit taking when gold hit its record high.

Heading toward the end of a financial quarter, many large financial institutions sold down parts of their holdings to take advantage of the high price. The rebound on Wall Street and the US dollar’s rally also contributed to the drop.

Many analysts also expressed concerns that a slowdown in the US would lead to reduced consumption of raw materials such as gold.

Gold has now recovered to healthier levels as concerns remain around the uncertainty of the global credit crunch.

In other news – if all the stresses of the uncertain financial times are getting to you, perhaps you could consider going in for a 24 carat gold facial – only US$300 a pop.

Gold update 19 March

It’s been a pretty big week for gold. After hitting US$1000 an ounce last week the price rose to US$1012 on the back of the news that America’s fifth largest bank Bears Stearns was bought by JPMorgan for $2 a share (after trading at $150 a share 12 months ago). Investors took flight and bought up gold as a safe haven investment.

Profit taking has seen gold drop to US$988-$990 today.

Media interest in gold’s rise has been intense over the past week and the NZ Mint featured on TV3 News and Sunrise to talk about international factors influencing the price of gold and how New Zealand investors are investing in the precious metal.

We expect the price to remain healthy as uncertainty in world markets continues.

Gold hits US$1000

You would have heard the news.

It dropped away a touch after breaking through the US$1000 mark and is now trading at US$995 a troy ounce.

As you can imagine we are pretty busy here at the NZ Mint. It's a good day to be in the gold business.

Gold update 13 March

Gold has been up and down over the past week. It hit a high of US$992.95 before dropping back down.

Gold is sitting at US$983 after increasing by over $9.65 in the past 24 hours.

It’s up this week due primarily to oil hitting US$110 a barrel and the US dollar hitting record lows against the euro.

Long term we should see decreasing supply affect the price. The Chief Financial Officer of Newmont Mining Group Russell Ball said that the gold mining industry is in for a “1 to 2 percent decline for at least the foreseeable future. I would see that as the next 10 years" – with increasing global demand, that kind of supply reduction will push up prices.

Gold update 6 March

Gold is up at US$985 at the moment and looks set to head for even greater highs.

There has been a sense with analysts that this run on gold would end and the price would settle back down around the $850 mark.

However more and more analysts are now saying that gold looks well supported at current prices and should crack that magic US$1,000 in the near future.

In an article on the Financial Times website John Reade precious metals analyst at UBS says, “We have argued regularly that fundamental support for gold lies between $700 and $750, yet gold stubbornly refuses to correct despite occasional periods of dollar strength, crude softness and the waxing and waning of risk appetite.”

The article reinforces what we have been seeing here at the NZ Mint for a while; people are turning to gold as a safe haven investment in turbulent economic times. Global inflation remains high, supported by high oil, metal and agricultural prices – and as gold is an inflation-proof store of value, savvy investors are putting a part of their portfolio in the precious metal.

Last year gold’s value increased 31 percent and this year it has already risen 15 percent. Reade predicts gold to reach $1,025 an ounce in one month’s time and $1,075 in three months. Given current demand, those levels look increasingly likely.

Fun gold fact of the day: the biggest gold nugget ever found was in Victoria Australia and was called the ‘Welcome Stranger'.



It weighed 2316 troy ounces or 72.04 kg. After smelting, 2268 ounces were obtained from the nugget. At today’s prices that would fetch a cool $2.2million. Crikey.