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 - week ending July 6

Gold spot price ranges
USD: 657 – 647.00
NZD: 827.00 – 844.00
NZDUSD: .7870- .7760

A steady week for gold. We are seeing a compressed price range, with the main emphasis being on expectation of growth rather than immediate rises.
A stronger US dollar has seen downward pressure on gold; this can be seen by the drop below $650 and recovery after the July 4th holiday period.

The NZD again is the major player in the local market, with no sign of the Reserve bank intervening despite the 78c mark being reached. We have calculated that if you took the exchange rate back 1year ( .6300 ) you would expect to see a 22% increase on today’s price. A great argument for hedging!

Newmont mines announced this morning that they had scrapped their entire 1.85million oz gold hedge position. This is expected to push prices up, but appears to be still being digested by the markets. Watch this space.
Once again oil is hitting the headlines, this time because of the issues in Nigeria, including a series of kidnappings of oil workers, which coupled with the gasoline stock issues in the US and the continuing problems in the gulf; we are starting to see the oil prices creep upwards, which in turn adds impetus to the upward gold price.

Again the over all consensus is a period of consolidation prior to more upward growth for the bullion market.
Reefton gold mine opening
Don’t throw away your cell phone – $340 million worth of gold in them.

Gold price info - week ending June 29

Gold spot price ranges
USD: 652 – 639.00
NZD: 871.00 – 851.00
NZDUSD: .7576- .7703

Yet another busy week, with a big range of movement on the currency front. We experienced a large drop midweek, primarily because of a release by the Reserve Bank explaining their reasoning for the intervention in the NZD exchange rate, and strong talk from the Bank of Japan regarding the carry trades. This then picked back up and we’ve seen record highs of over .77 in the last 24 hours. The expectation is the NZDUSD exchange is still going to keep climbing. The question is for how long? The effect this has on the gold price locally: gold is once again looking like the great currency hedge, despite the gold price increasing Thursday/Friday we’ve not seen much increase in the NZ price of Gold.

Gold has had an up and down week too, with the drop in price midweek, primarily caused by a drop in the oil price, and a move away from US investors to Treasury Bonds. This movement is being caused by better than expected economic data, but we still have more news coming this weekend, so things may change. However the oil prices increased last night, and with the prices being a their lowest point since January / February, a lot of physical buyers came back into the market yesterday, which has pushed the price back up to the mid 640’s with an expectation of a continued rise. The bargain buyers appear to be adhering to the old adage, buy on the dip.

Supply issues have been popping up again, with Russia announcing a 1% reduction in year on year supply, which coupled with the rumblings of the Labour strike in South Africa (which may still be on) and the worries about the declining production and increasing demand in Asia and the Middle East is likely to continue to be a long term factor in the prices.

A recent study by GNS Science and the New Zealand IER; has shown that there may be Gold deposits in the Far North (amongst $5 billion dollars of metallic mineral deposits) Coupled with the positive news from Heritage Gold of more finds in Waihi can only be good news for the local economy.

Looking for a way to use your gold? Have a look at the Emirates Palace Hotel. It cost more than $US3 billion dollars to build, with its golden rooftop domes to its gold-leaf lobby mosaics. The Flag poles are made of gold and the 1,002 chandeliers with Swarovski crystal made of, you guessed it, Gold.

At $US11,000 per night it rates itself as a 6 or 7 star equivalent “palace”.

And what would you wear to a place like this? How about General Ulysses S. Grant's sword at US$1.6m?