Chart of the week | Gold in NZ dollars ready to break out

This week:

– Chart of the week: Gold in NZ dollars ready to break out?

– The trusty Gold Survival Guide Time to Buy indicator

– Greece – The never ending story

– World Gold Council latest data

– Let’s have a Chat

– What do readers and buyers say about us?

– This weeks articles

Chart of the week: Gold in NZ dollars ready to break out?

The current chart of gold in NZ dollars looks interesting to us.  As we mentioned a couple of weeks back, the zone around the 200 day moving average (red line) is historically a decent one to buy.  You can see in the chart below that the price is currently compressed between this and the 50 day moving average (blue line).  The odds are it’s likely to break either above or below one of these lines pretty soon.  If we had to have a stab we’d gamble on it holding around the 200 day moving average here.

Update: We wrote the above last night.  This morning (Wed 22 Feb) gold in NZ dollars is at $2104 which is just under the 50 day moving average so looks like it could be heading up on the back of the Greek bailout announcement overnight.   More on Greece below.

The Trusty Gold Survival Guide Time to Buy Indicator

Another indicator showing us that now might be a decent time to buy is our “patent pending” GSG RS indicator.  What is this very scientific indicator you ask?

It’s the Gold Survival Guide Reader Sentiment indicator.  It’s simply a rough look at how many requests for quotes and actual purchases we get.  From what we’ve seen in the past year or 2 when it’s comparatively quiet (as it is now), it’s generally a good time to be buying.  This generally coincides with a lack of interest from the mainstream media in gold, which is certainly the case now.

Greece – The never ending story

Briefly on the Greek “deal” we think it’s a pretty safe bet this isn’t (yet again) the last on this issue.  We’ve been reading a bit of late about the International Derivatives Swaps Association  (ISDA).  (Hat tip to Jim Sinclair for bringing this to our attention.)  This is basically an organisation made up of banks and financial companies that determines what is and isn’t a credit default.  Why does this matter?

In the case of Greece, private government bond holders are being forced into taking a loss of 70%.  But the ISDN will say this isn’t a default.

Why?

Because if it was deemed a default then credit default swaps (CDS’s) will come into force.  These derivatives are meant to insure bond holders against default.  But due to the interconnected nature of the banking system, if the CDS’s were activated, it would likely set off a domino event and lead to the wipeout of many financial institutions and probably the collapse of the current financial system.

Given these very same banks and financial institutions who would be at threat, are also who decides what is and isn’t a default, not surprisingly these institutions will not want this to happen and will determine that this is not a default.

What does this mean overall?

They are doing their damnedest to not let governments “default” and walk away from their debts.  So there will be more bailouts and the average man on the street will continue to pay for this indirectly through debasement of currencies, and in some countries directly through ongoing “austerity measures”.

World Gold Council latest data

We always like to keep an eye on the World Gold Council (WGC) stats.  These are published every quarter and often contain some interesting tidbits of info.  Last week the Demand Trends report for 2011 was released showing that the amount of gold bought in China rose 20% in 2011 over the year before to 770 metric tons.  The WGC reported that “It is likely that China will emerge as the largest gold market in the world for the first time in 2012 demand terms” [taking over from India].

We also read this comment from the Managing Director at the WGC…

“Marcus Grubb, managing director for investment at the WGC, a lobby group for the gold mining industry, told the Financial Times that buying by the People’s Bank of China could explain a large discrepancy between Chinese imports and the WGC’s estimates of consumer demand in the country.

“There is absolutely a discrepancy in the import figures,” said Marcus Grubb. “The obvious inference is that the central bank is buying.”

So it seems China’s central bank is continuing to quietly stockpile gold.  Could they suspect that things aren’t going to turn out swimmingly for the current monetary system perhaps?

Let’s have a Chat

We’ve added a “live chat” feature to the website this week.  So if you’re on the site and have a question on anything then just click the “Live Chat” icon that floats down the right hand side of the page with David’s lovely mug on it!  This lets you “instant message” us and we can generally give an “instant” answer.

What do readers and buyers say about us?

In case you’ve wondered if anyone actually buys anything from us, we’ve also added a testimonials page to the site this past week.  This actually shows “reviews” people have left on our Google Places (a.k.a. Google Maps) local business page.

So if you’ve had a good experience with us or learnt a thing or 2 from any of our articles then perhaps you’d consider leaving us a review on there?  We’d really appreciate it if you’d help us spread the word.  Just click the “Add a Review” button on the testimonial page and you’ll be taken to our Google Maps page to leave a review by clicking on a “star” rating and leaving your comments. (See image below)

Our thanks in advance if you do.

This weeks articles

There’s a great article from Darryl Schoon on Central Bank gold “price management”.  We learnt a thing or 2 from this one ourselves.

The other article is an interview with Doug Casey on Iran and the US and the probability of a warbreaking out.

The links and intros to both are also just at the end of this email.

As always if you’d like a specific quote you can get hold of David by:

1. Email: orders@goldsurvivalguide.co.nz

2. Phone: 0800 888 GOLD ( 0800 888 465 )

3. or Online order form and full product list

Have a golden week!  

This Weeks Articles:

GOLD FIRE SALE – Buy Now Sale Ends Soon

2012-02-16 18:04:40-05 We’ve learnt a thing or 2 in the past from Darryl Schoon.  Both in person, having heard him speak and having had a couple of interesting conversations with him, but also in his writings.  He has an ability to delve into history and pull a few new and interesting points out of the past that […] read more…

Doug Casey: Is a US-Iran War Inevitable? 2012-02-21 00:47:28-05 While a war between the US and Iran doesn’t seem directly related to the topic of gold, in this interview with Doug Casey of Casey Research, the discussion does eventually head the way of the barbarous relic.  He points out that the recent moves by the US to restrict trading with Iran may actually result […] read more…

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.