Bank Economists Change Their Tune – Again


Prices and Charts

Change from last weeks gold and silver prices

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Buying Back 1oz NZ Gold 9999 Purity $2034
Buying Back 1kg NZ Silver 999 Purity $695

Everything in the Red This Week

Our price change table above shows nothing but red this week.

After such a strong run higher it is not surprising NZD gold is down for the week. However what is surprising is how little gold has fallen to date.

NZD gold is still above $2100. So far it hasn’t gotten back to any of the buy zones shown in the chart below.

There does seem to be a fair bit of expectation that it will pull back further yet. We’ve had a few people write in asking if we thought gold will get back below $2050.

So perhaps it will surprise us all and just consolidate at these higher levels for a little while instead? That would also get the RSI overbought/oversold indicator back down to more neutral levels around 50.

NZ Dollar Gold Chart

It’s impossible to say what the price will do in the shorter term. However in the longer term we do look set up for much higher prices ahead. For more on this see: USD Gold Breakout – 6 Year High Above $1400 – What Happens Now? 

Silver Holding Firm

NZD silver was barely down this week. Silver continues to sit right on the multi year downtrend line after breaking out of this wedge formation. We need to see silver head back above $23.50 to confirm the breakout.

More on silver below.

NZ Dollar Silver Chart

The New Zealand dollar is down almost 1% on last week. Just like last week the 0.67 level again proved tough resistance to crack. The Kiwi sits on the 50 day moving average now. But we could see a further move back down to test 0.65 again.

NZ Dollar Chart

Need Help Understanding the Charts?

Check out this post if any of the terms we use when discussing the gold, silver and NZ Dollar charts are unknown to you:

Gold and Silver Technical Analysis: The Ultimate Beginners Guide

Continues below


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What is Best – Gold or Silver?

Here’s perhaps one of our most common questions. A reader asks:

“I suppose my biggest question (like most others I guess) is what is best – gold or silver?  It seems to me that silver is so undervalued at the moment that it is the best investment – but then nothing is generally as it seems.  I would appreciate your thoughts on this.”

Our thoughts:

Right now silver certainly has more upside than gold. The gold to silver ratio is the highest since 1991 at around 93.

This will almost certainly come down to at least the long run average in the 50’s. Just as it has done previously when at such elevated levels. But it’s a case of when this will happen?

With silver you certainly need to have patience. Just buy it and forget about it for a while. Don’t watch the price every day.

Also have you read these couple of articles?

Should I Buy Gold or Silver? 7 Factors to Consider in Gold vs Silver

Could Silver Be Worth More Than Gold?

As we say in two these posts, our general thought is that it’s a good idea to get a bit of both. Then you don’t have to guess which performs better. As at certain times (like the last few years) gold will outperform silver.

However in the coming years, our best guess is silver will, before too long, outperform gold. So right now is a good time to be overweight in silver.

How to Swap Gold for Silver – Taking Advantage of the Record High Gold Silver Ratio

But what about if you already own a reasonable amount of gold? Would you like to sell your gold and buy silver. There is a better more cost effective way.

See why choosing to swap your gold for silver just might be a good idea right now…

How to Swap Gold for Silver – Taking Advantage of the Record High Gold Silver Ratio

How to Swap Gold for Silver - Taking Advantage of the Record High Gold Silver Ratio

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NZ’s Proposed Deposit Insurance Falls Well Short of Protecting People’s Savings

Last weeks article on the proposed bank deposit protection scheme certainly drew plenty of interest and a few thoughtful comments.

New Zealand Bank Deposit Protection Scheme – Does N. Z. Have Bank Deposit Insurance?

Helen Mary Dervan, a senior lecturer at AUT, this week chimes in on where the weaknesses of the scheme are.

As we showed last week, the proposed limits are well below other developed nations.

She notes:

“If the [deposit protection] limit is too low, the risk is that the deposit insurance scheme will not stop bank runs and not protect financial stability and the economy.

It could even cause pre-emptive bank runs. If that happened, the Government would need to urgently increase the deposit insurance limit and take other extraordinary measures, but this can lead to other difficulties, including increased overall costs, which ultimately fall back on the taxpayer.”

Source: NZ’s plan for deposit insurance falls well short of protecting people’s savings

Your Questions Wanted

Remember, if you’ve got a specific question, be sure to send it in to be in the running for a 1oz silver coin.

Win a silver coin

Bank Economists Change Their Tune – Again

Way back in July of last year we were highlighting numbers that pointed to the New Zealand economy slowing.

We also highlighted that interest rate cuts were far more likely than anyone expected.

The bank economists were at that stage predicting interest rate increases and then a long period of time on hold.

How things have changed in a year.

Kiwibank economists are now highlighting the likelihood of the Official Cash Rate (OCR) getting below 1%.

“Wholesale interest rates drifted lower last week, as the domestic data weakened and central banks offshore cut. We continue to expect the RBNZ to cut the OCR in August. The question is whether the RBNZ will need to do more. The need to cut the OCR to 1% and below, is becoming increasingly likely,” the economists said.”

Source.

ASB have also have changed their tune. They now believe we’ll see two more rate cuts in 2019. And that the OCR will hit 1% by the end of the year:

“NZIER Q2 Quarterly Survey of Business Opinion was weaker than we expected – again.

Reported activity was very weak over Q2 and consistent with quarterly GDP growth of just 0.3-0.4%.

We now expect the RBNZ to cut the OCR by 25 basis points both August and November.”

Meanwhile…

“Westpac economists have taken the pruning shears to their economic growth forecasts and now see GDP growth of just 0.4% (down from previous pick of 0.6%) for the 2019 June quarter.

This would give annual GDP growth of just 2.4%, which the economists, in their Weekly Commentary, note would be “not much faster than the rate of population growth over the past year”.
Source.

So the banks are starting to agree that we’re likely to see interest rates at or below 1% by the end of the year.  While ASB expects “annual headline CPI inflation to remain below 2% over 2019”.

Negative Real Interest Rates

This means we’re likely to see negative real interest rates here in New Zealand for some time.

Remember the real interest rate takes into account the rate of inflation. If inflation is higher than interest rates, then the real inflation rate will be negative.

This is the environment in which people flock to gold.

If you’re worried about the lack of return on your savings in the bank consider moving some into gold (and silver).

The current deal on Perth Mint gold bars for less than local gold is hard to beat.

Or give us a call if you have any questions about buying either.

  1. Email: orders@goldsurvivalguide.co.nz
  2. Phone: 0800 888 GOLD ( 0800 888 465 ) (or +64 9 2813898)
  3. or Shop Online with indicative pricing

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This Weeks Articles:

How to Swap Gold for Silver – Taking Advantage of the Record High Gold Silver Ratio

Tue, 9 Jul 2019 1:06 PM NZST

See why choosing to swap your gold for silver just might be a good idea right now… Do you own a reasonable amount of gold? Would you like to swap your gold for silver? We received an excellent question from a reader this week on just this topic: “With the ratio above 90, I was […]

The post How to Swap Gold for Silver – Taking Advantage of the Record High Gold Silver Ratioappeared first on Gold Survival Guide.

Read More…

The Gold Correction is Underway

Fri, 5 Jul 2019 9:52 AM NZST

Prices and Charts Looking to sell your gold and silver? Visit this page for more information Buying Back 1oz NZ Gold 9999 Purity $2040 Buying Back 1kg NZ Silver 999 Purity $697 The Gold Correction is Underway The gold correction we expected (see: USD Gold Breakout – 6 Year High Above $1400 – What Happens Now?) […]

The post The Gold Correction is Underway appeared first on Gold Survival Guide.

Read More…

New Zealand Bank Deposit Protection Scheme – Does N. Z. Have Bank Deposit Insurance?

Wed, 3 Jul 2019 1:16 PM NZST

How safe are your bank deposits? Does New Zealand have a bank deposit insurance scheme? Or is there a government bank deposit guarantee? The short answer is no. New Zealand doesn’t currently have a bank deposit protection scheme. However this may be about to change. The Labour/New Zealand First government announced a plan on 24 […]

The post New Zealand Bank Deposit Protection Scheme – Does N. Z. Have Bank Deposit Insurance? appeared first on Gold Survival Guide.

Read More…

Derivatives – a Beginner’s Guide to “Financial Weapons of Mass Destruction”

Tue, 2 Jul 2019 11:07 AM NZST

Following the 2009 financial crisis, the term derivatives has been firmly embedded in todays lexicon. With the failure of Bear Stearns in 2008, and subsequent bailout of multiple other too big too fail banks, the term “derivative” was popping up everywhere.  Then in 2012 we had JP Morgan’s $7 billion trading loss on credit derivatives […]

The post Derivatives – a Beginner’s Guide to “Financial Weapons of Mass Destruction” appeared first on Gold Survival Guide.

Read More…
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.

  1. Email: orders@goldsurvivalguide.co.nz
  2. Phone: 0800 888 GOLD ( 0800 888 465 ) (or +64 9 2813898)
  3. or Online order form with indicative pricing


7 Reasons to Buy Gold & Silver via GoldSurvivalGuide

Today’s Prices to Buy
1oz NZ 99.99% pure gold bar
1oz NZ Gold Ingot
$2193
1kg NZ 99.9% pure silver bar 
1 Kilo NZ Silver Bar
$803 (price is per kilo for orders of 1-24 kgs)

$798 (price is per kilo only for orders of 25 kgs or more)

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1oz PAMP Suisse 99.99% pure gold bar
PAMP Lunar Goat Gold Bar
$2222
1kg PAMP 99.9% pure silver bar
PAMP Silver
$853
1oz Canadian Gold Maple 99.99% pure gold coin (2019)
Gold Maple
$2269
1oz Canadian Silver Maple 99.99% pure silver coin
(Minimum order size tube of 25 coins)

Silver Monster Box
Tube of 25 $735
Box of 500
$13,939 (backdated other years)

(Fully insured and delivered)
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Note:

  • Prices are excluding delivery
  • 1 Troy ounce = 31.1 grams
  • 1 Kg = 32.15 Troy ounces
  • Request special pricing for larger orders such as monster box of Canadian maple silver coins
  • Lower pricing for local gold orders of 10 to 29ozs and best pricing for 30 ozs or more.
  • Foreign currency options available so you can purchase from USD, AUD, EURO, GBP
  • Plus we accept BTC, BCH, Visa and Mastercard
  • Note: For local gold and silver orders your funds are deposited into our suppliers bank account. We receive a finders fee direct from them. Pricing is as good or sometimes even better than if you went direct.

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We look forward to hearing from you soon.

Have a golden week!

David (and Glenn)
GoldSurvivalGuide.co.nz
Ph: 0800 888 465
From outside NZ: +64 9 281 3898
email: orders@goldsurvivalguide.co.nz

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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.
Copyright © 2019 Gold Survival Guide.
All Rights Reserved.

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3 thoughts on “Bank Economists Change Their Tune – Again

  1. Pingback: Has the Silver Breakout Started? Why a Short Squeeze Could be Developing - Gold Survival Guide

  2. Pingback: Yes the “Small” NZ Banks Are Still Subject to Bail-In - Gold Survival Guide

  3. Pingback: RBNZ Slashes OCR - The Race to the Bottom is Speeding Up and NZ Won’t Be Left Behind! - Gold Survival Guide

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