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Gold Kiosks evidence of gold bubble in NZ?‎

From the Sunday Star Times comes this article outlining how Gold Buyers Kiosks are popping up in New Zealand Malls. 

Gold kiosks panned for poor prices

KIOSKS HAVE sprung up in shopping malls all over the country offering to buy your unwanted gold as US dollar prices soar, but they may not always offer the best deal for those tempted to sell.

GoldBuyers New Zealand, a Kiwi company part-owned by Aussie firm GoldBuyers, has opened kiosks in 14 malls throughout the country with a further five about to open, and is seeking to take advantage of a big spike in the gold price which is tempting many people to cash up their old gold.

Gold prices have spiked to $US1112 ($1587) a troy ounce from around $US850 ($1545) a year ago as speculators and investors have sold up shares and other assets to buy gold, which has the reputation as a safe haven in periods of financial crisis.

That has suddenly made it appear a valuable commodity and enabled gold buyers to offer more attractive prices for unwanted family jewellery.

But those selling their gold need to realise the cost of recycling their gold, and the margin the gold-buyer takes, means they are likely to get less than half the value of the gold content of their unwanted bracelets, rings, earrings and necklaces.

And, judging by a mystery shop by the Sunday Star-Times, the mall is one of the worst places to go to sell gold…

The article also mentions that the Goldbuyers company is looking for “reps to hold goldbuying parties in their homes in return for a slice of the profits.”

Some might argue that this is evidence of a gold bubble forming.  However we would counter that to the contrary this shows average Joe or Joanne are more likely sellers of gold than buyers at current prices.

When kiosks selling gold coins to the masses arrive in Westfield Shopping Malls then we’ll take notice and that may be the time to consider gold might be topping.  Until then holders rather than sellers we will be.

 

China becomes worlds biggest gold buyer in 2009

Big changes were seen in 2009 in the global gold market.  Not only was it the first time in 21 years that the world’s central banks became net buyers of gold, but China was also the biggest buyer of gold, adding 454 tonnes to it’s reserves.  Russia and India were the other major buyers in 2009.

Full article from ChinaMining.org is here.

Jim Rogers: silver and agriculture are the best opportunities right now

Jim Rogers was recently interviewed on CNBC (full video below).  He thinks the US dollar will rally in the short term before continuing it’s long term down trend.  He likes silver more than gold right now although will buy more gold if it drops a bit further.  Although he “wouldn’t think of selling [gold]” at the moment either.  

He also currently rates agriculture over other hard commodities like copper which has also risen sharply this year.  He tells the interviewer as he has done to others previously, that if she wants to make money to become a farmer!

And while he mentions there are and will be many opportunities in foreign currencies, how’s this for a sound bite…

“Paper money throughout the world is being printed everywhere, so all paper money is suspect.  We may have to wind up with all our paper money in commodities, cos there is no paper money we can trust.”

And while Jim could be accused of “talking his book”, (he has direct involvement in farmland investments and designed the Rogers International Commodity Index ( RICI ) in 1998), we’d recommend taking notice of someone who’s made millions in the past, rather than the central bankers who print millions or rather trillions!

Specifically Rogers co-founded the quantum fund with George Soros in 1970 which made 4200% in the next decade during the last commodities bull market, while the broad stock market made less than 50% over that time.  So he knows a thing or 2 about long term trends, particularly in commodities.

NZ gold miner in joint venture talks with Chinese

Heritage Gold is in talks with potential joint venture partners in China to develop the historic Talisman mine. 

The NZX listed New Zealand gold miner has been granted a 25 year permit to mine in the hills of the Karangahake Gorge between Waihi and Paeroa, with potential to produce gold and silver worth 75 million a year.

Full NZ Herald article here.

U.S. Mint sells out of 1/10th ounce gold coins in one day

Further evidence of the increasing demand for gold comes by way of the U.S. Mint.  Just one day after releasing it’s new one tenth ounce gold coin they have sold out.  And the new half ounce and quarter ounce coins are now also extremely limted. 

Amazingly they sold 345,000 coins in one day!

This just a week after the Mint suspended sales of it’s one ounce American Gold Eagle coin as the supply had been depleted.

Full details can be found here.

One of the Worlds Largest Gold Producers to explore in Coromandel, NZ

Newmont Mining, one of the worlds largest gold producers has won the right to explore 3000ha near Pauanui in the Coromandel Peninsula of New Zealand, for gold and silver.

Newmont already has a large open cast mine in nearby Waihi which is nearing the end of it’s life.  You can read the full NZ Herald article here.

There is still potentially plenty of precious metals remaining in New Zealand to be mined although with much of it likely to be in conservation areas there will be many hurdles for potential miners.  The National Government has made murmurings of doing a “stock take” of what may be present however.

Unfortunately with much of the gold and silver mined in NZ being exported the gain to NZ of more precious metal being dug up is not as great as it could be.  It’s a pity more kiwis weren’t buying and storing some of their “wealth” in real money instead of in over-priced housing.

Marc Faber: The dollar to go up short term but go to zero in 10 years

Dr Marc Faber of the Gloom, Boom and Doom Report recently was on Bloomberg (video below) stating that while the US dollar may be oversold in the short term, in the long run, over say 10 years, it will go to zero .ie. be worthless.  On price deflation versus inflation he thinks we could get both concurrently.

Cash and US treasury bonds will be the big losers, while gold and commodities will be winners and stocks will also do better than cash.

Faber said Bernanke can be relied upon to continue to print money to prop up the stock market. 

However we say, remember you can still lose money in real terms (measured against gold) as stocks rise.  Choose them carefully and measure your returns against golds rise.  You should do the same with property.  Read this new article by J.S. Kim exclusive to GoldSurvivalGuide for more on how to track this by following Central Bank interest rates:

The Current Stage of the New Zealand Real Estate Cycle

Russia also ready to abandon the dollar

Russian Prime Minister Vladimir Putin annouced this week they are ready to consider using the Chinese and Russian national currencies when doing oil and gas deals with China, instead of the US dollar.  They will join Brazil who recently agreed to trade with China in yuan (chinese currency) instead of dollars.  Along with the annoucement last month from Iran that they are dumping the dollar to use the euro in their Oil Stabilisation Fund, to “protect itself from the fragilityof the US economy and the weak dollar” according to Iranian state radio.

While we think the US dollar is toast in the long run, there is so much negative news on the dollar coming out all at once that it makes us just a tiny bit suspicious.  Regardless, the dollar continues to fall while just about everything else rises.  In particular gold, silver and resource based currencies like the Canadian, Australian and New Zealand dollars.

The demise of the US dollar by 2018?

With the US Dollar dropping significantly again yesterday, (and gold gaining significantly) the blame is being placed on an article from Middle East based U.K. journalist Robert Fisk in the British paper The Independent.

Mr Fisk says his contacts tell him that the Gulf Arab nations along with China, Russia, France and Japan, are planning on ceasing trading oil in US dollars and instead will use a basket of currencies including Gold, the Euro, the Japanese Yen, the Chinese Yuan, and a planned new Gulf currency.

This is meant to happen within 9 years.  The article is a must read and can be found here.

We believe it’s merely a case of when not if the US Dollar loses it’s roll as the world reserve currency.  But it’s very interesting that gold is now also being mentioned as one of the pieces in a possible new basket of currencies.  However the US dollar is getting so much bad press at the moment that we wouldn’t be surprised to see it gain some strength in the short term.  So US dollar priced gold could go either way at the moment it seems.

Anyway if there is any truth to the report, it is just further proof of the growing distrust of the money masters in the US.  Not surprisingly though there have been loud denials from the Central Bankers of most of the countries mentioned.  Here’s a video of Robert Fisk being interviewed on the subject.  At the end he mentions the fact that there have been such vigorous denials may well be strong proof there is some truth to the report!

If you want to see a number of opinions on the story check this commentary out…

The world and the dollar react to Robert Fisk

Also this is an interesting video from Max Kaiser where he theorises that these countries are sick and tired of funding the USA’s wars across the globe, which is what they effectively do when buying US government treasuries.  We discuss further the advantages the US has as the holder of the global reserve currency in our eCourse which you can access here. 

Max also says his contacts reckon the new currency will be 50% backed by gold and that a 50% devaluation of the dollar is on the cards.  All interesting stuff!

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