|Spot Price Today / oz||Weekly Change ($)||Weekly Change (%)|
|NZD Gold||$1896.75||+ $6.96||+ 0.36%|
|USD Gold||$1338.35||+ $24.06||+ 1.83%|
|NZD Silver||$28.82||+ $0.96||+ 3.44%|
|USD Silver||$20.33||+ $0.95||+ 4.90%|
|NZD/USD||0.7056||+ 0.0101||+ 1.45%|
|Looking to sell your gold and silver?|
|Buying Back 1oz NZ Gold 9999 Purity||$1824|
|Buying Back 1kg NZ Silver 999 Purity||$883|
NZD gold has edged up slightly this week from last. It yet again got close to the overhead resistance at $1925 but failed to break through. It continues to consolidate above the 50 day moving average as it has done for the past month.
Meanwhile silver continues to surprise and is holding up above the $28 level. After such a strong surge higher it would have been expected to correct more than this by now. The Relative Strength Index (RSI) at the top of the chart has moved down from overbought levels it was at.
We’d still expect that silver would be due to pull back further from these levels yet. But if there’s one thing silver can do it’s that it can surprise us!
But for now it is managing to stay above the uptrend line it broke above a month ago. Perhaps it can continue to consolidate here instead?
More on silver shortly.
The NZ dollar has moved back up this week after it’s sharp plummet when the RBNZ indicated further interest rate cuts are ahead. It’s back above the 50 day moving average and looks to be in an uptrend still to us.
Steve Sjuggerud reckons it’s likely silver will fall by close to 10% by the end of this year:
Do we disagree?
In short, no. Silver has certainly shot higher and it would not be a surprise to see it pull back from here. If you look back at the silver chart above, in NZ dollar terms a 10% fall from current prices of $28.80 would take it back to around $26.
This would coincide with where the current run up started from and what is now the horizontal support line on the chart.
So this really wouldn’t be a surprise or even a big move. Will it play out over the next 6 months? Who knows? It could happen faster than that. There’s also the chance it may not happen at all.
The argument for the Commitment of Traders (COT) silver futures report indicating that silver is very overbought is somewhat countered by a couple of things we’ve read recently.
Alistair Macleod reasons that it could be institutions that are building non-speculative positions in gold via futures. So they may not leave in a hurry and it could be the bullion banks that are forced to cover their short positions. This would push the price sharply higher. Silver would likely follow in this case:
So what to do?
We stick to our same old boring advice of if you’re unsure consider breaking the funds you desire to turn into gold or silver into a number of tranches. Consider taking a position now but then keeping some cash in hand in case the correction does eventuate.
Deutsche Bank, the world’s largest derivative holder today announced their profits had plunged by 98%. A Zerohedge report commented that:
But what may really be the biggest issue is that as Bix Weir pointed out there is likely to be a credit rating downgrade on Deutsche Bank to below investment grade in the coming weeks.
Why does that matter?
Because most derivatives “that are written by the issuing company have a triggering requirement of maintaining an investment grade rating.”
So could Deutsche Bank set off a derivative domino before too long?
If you have trouble getting your head around the concept of derivatives check out our beginner’s guide to derivatives.
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Financial advisor and author Martin Hawes shared our sentiments after reading an opinion piece from the head of ANZ last week:
We admit to scratching our head about this. As Hawes says it is indeed a strange thing to see the head of a bank “talking down his own book”.
So why is he?
To save face maybe? If this comes to pass he can say “it wasn’t our fault, we tried to tell you” perhaps? We’ll have to keep mulling that over. Please let us know if you have a theory?
A Danish banker had a very similar sounding warning to the ANZ head this week too:
The article goes on to say that apartment prices in Denmark are 5% above their 2006 highs.
So does Denmark have a “housing shortage” too?
Or is excess money, low interest rates and the “Cantillon effect” more likely at play?
Denmark has had negative interest rates longer than anywhere else – 4 years now. So perhaps the fact that the housing market has surged higher should not be a surprise.
We continue to be dubious of the housing shortage theory here in Auckland.
Speaking of negative interest rates. These really are starting to become all pervading.
10 of 23 developed nation’s 5 year government bonds now have negative yields. Meaning you pay the government for the privilege of lending them your money! If you’ve got kids try explaining how that works to them!
This is perhaps a key driver of the rise in gold and silver that we’ve seen this year.
And it’s not just government bonds with negative rates:
No s**t Sherlock. It’s definitely not a good time to be trying to earn a yield on anything. We doubt they needed a government committee to work that one out!
You can see in the chart that New Zealand is a fair way from negative rates yet.
But as more and more other countries go “full retard” on their interest rates, there’s no reason to expect ours not to continue to fall too.
As we say in the intro to one of the articles this week (see link below) who’s to say in such a crazy world that it can’t happen here eventually too?
With the trend in interest rates continuing to be done and the longer term trends in gold and silver looking like being up, it makes sense to take out some financial insurance.
We have free shipping on boxes of 500 x 1oz Canadian 9999 purity Silver Maples delivered to your door via UPS, fully insured until you sign for them.
Price today is $16,790.
Delivery in approx 7-10 business days.
We wouldn’t be surprised to see the wait times increase for these soon and quite likely the premiums too.
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Wed, 27 Jul 2016 2:57 PM NZST
Yesterday, Casey Research founder Doug Casey shared his thoughts on the Brexit. Today, in part two, he lays out the major trends the Brexit will accelerate…and explains how you can set yourself up to profit from them… Weekend Edition: How to Profit From These Massive, Brexit-Induced Trends By Doug Casey This has the makings […]
Wed, 27 Jul 2016 2:40 PM NZST
It’s been a month since “Brexit”…the historic event that wiped out more than $3 trillion from the global stock market in two days. But what happens now? Today, Casey Research founder Doug Casey breaks down what the decision means for Britain…and how it foreshadows some big changes in the world at large… Weekend Edition: Doug […]
Wed, 27 Jul 2016 2:27 PM NZST
There seems to be just more and more news items on negative interest rates lately. We seem to be a long way from these here in New Zealand, but for now the trend in interest rates seems to be down still. So who says negative interest rates can’t happen here too? It’s crazy they exist […]
Tue, 26 Jul 2016 2:24 PM NZST
This Week: How to Sell Gold and Silver Bullion RBNZ: First they taketh and then they giveth back The Rising Danger Of A Bidless Market How to Survive the Deep State Prices and Charts Spot Price Today / oz Weekly Change ($) Weekly Change (%) NZD Gold $1889.70 + $34.29 + 1.85% USD Gold $1314.29 […]
Fri, 22 Jul 2016 1:26 PM NZST
Is “helicopter money” coming to Japan? This article makes a very good argument as to why Japan might be the first major nation to try very soon. This followed a visit to Japan from someone that was previously the world’s most powerful central banker… The Serious Warning No One’s Talking About By Justin Spittler […]
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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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