|Spot Price Today / oz||Weekly Change ($)||Weekly Change (%)|
|NZD Gold||$1769.36||– $48.34||– 2.65%|
|USD Gold||$1266.86||– $54.79||– 4.14%|
|NZD Silver||$24.80||– $1.61||– 6.09%|
|USD Silver||$17.76||– $1.44||– 7.50%|
|NZD/USD||0.7160||– 0.0111||– 1.52%|
|Looking to sell your gold and silver?Visit this page for more information|
|Buying Back 1oz NZ Gold 9999 Purity||$1702|
|Buying Back 1kg NZ Silver 999 Purity||$760|
Gold and silver both took hits to the jaw yesterday.
For gold in NZ Dollars this took the price down well below the 200 day moving average.
It’s important to note that where the price sits today is at the top of the range that has proven to be strong support since April. That is the range between $1750 and $1775.
So in the long run this range could well prove to be an excellent buying zone.
Of course there remains a chance of the price dipping all the way down to the long term rising support line at $1650.
However we are now close to a 50% retracement of the rise from the lows of late December from around $1560 up to $1945. This is not an uncommon occurrence after such a sharp run higher as the one we saw at the start of 2016.
Our guess is we see the price hold around these levels. But that is, of course, just a guess.
Silver really took a beating yesterday. It plummeted to touch the 200 day moving average (MA) line. We’ve redrawn the rising trend-lines to reflect a less steep trend. This coincides with the 200 day MA and the horizontal support resistance line.
With the RSI (blue circle) also now close to overbought, the odds favour a bounce higher from here.
The NZ Dollar has also pulled back sharply dulling slightly the fall in local gold and silver prices. The Dollar is now below the 50 day MA and touching the lower Bollinger band, so a bounce from here is likely. But a test of the 200 day MA like we saw in late May is now on the cards.
After such a sharp fall in gold and silver yesterday we get the impression many are now wondering if we are to see a repeat of the massive decline we saw in 2013.
This morning we read a good summary from Jim Rickards as to why the price fell and what he personally did as a result. We can’t find too much to disagree with.
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The World Gold Council today also issued a report where they argue the fall in price is likely to lead to a pick up in demand:
We’ve read how so far this year China and India have backed off on their purchases. As they quite wisely prefer to buy at lower prices. So it would make sense that we may see a pickup in demand from them too.
Data from Bullionvault shows for private investors this is already the case:
So we think this indicates we could well find a meaningful bottom around these current levels.
The mainstream view is that the fall in gold was driven by the expectation of a rate hike by the Fed in December. However Simon Black of SovereignMan.com shows how in the slightly longer run negative interest rates actually seem far more likely in the USA:
And as we’ve been saying, with interest rates low and heading lower in much of the world, the risk remains for even lower rates here in New Zealand. Lower than the 1.75% that bank economists are talking about.
If the USA eventually ends up with negative rates, we could get close to that here too.
This could still play out while the trend in longer term non central bank set interest rates actually moves higher. This is the trend change that will really surprise people just like it did when the opposite happened at the end of the 1970’s. That was when interest rates started to fall.
We think the charts show that we are likely in excellent buying zones for both gold and silver.
The risk remains in sitting on the sidelines expecting an even larger retracement. We don’t expect this to be a repeat of 2013 when gold and silver just kept plummeting lower.
So if you’re wanting to buy but can’t overcome the fear of lower prices, there is an option. Take a position now and hold some cash back just in case we see even lower prices ahead. Then at least you will have a foothold in the market and some financial insurance in place.
Just reply to this email for a quote or phone David on 0800 888 465 if you have any questions.
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Thu, 6 Oct 2016 12:27 PM NZST
The danger for the world today is that we head even further along the path of centrally planned economies than we already have. History shows that this is not the path to freedom and success. Doing Casey points out the dangers the elites pose and how they are in fact very forthright in making their […]
Tue, 4 Oct 2016 3:55 PM NZST
Ronni Stoeferle at Incrementum has released a 2016 Chartbook for those of us that prefer images to words. It’s a trimmed down and image only version of his “In Gold We Trust 2016” report that we shared back in July: In Gold We Trust 2016 – Out Now! In an email this week he said: […]
Tue, 4 Oct 2016 12:45 PM NZST
While negative interest rates are prevalent in Europe, the risk of interest rates going even lower here remains. Even though low and negative rates have caused asset bubbles and as you’ll read below also heightened the odds of bank failures and system risk… You Better Get Used to Negative Interest Rates By Justin Spittler Negative […]
Thu, 29 Sep 2016 3:02 PM NZST
This Week: Next Crisis Cause: Deutsche Bank and EM Debt or Pensions? Bonds Are Super Risky Sell Stocks and Buy Gold RBNZ Considers New Banks “Dashboard” But Biggest Risk Is NZ Offshore Funding Prices and Charts Spot Price Today / oz Weekly Change ($) Weekly Change (%) NZD Gold $1817.70 – $3.80 – 0.20% USD […]
|As always we are happy to answer any questions you have about buying gold or silver. In fact, we encourage them, as it often gives us something to write about. So if you have any get in touch.|
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|The Legal stuff – Disclaimer:
We are not financial advisors, accountants or lawyers. Any information we provide is not intended as investment or financial advice. It is merely information based upon our own experiences. The information we discuss is of a general nature and should merely be used as a place to start your own research and you definitely should conduct your own due diligence. You should seek professional investment or financial advice before making any decisions.
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