Fed Holds Rates, Has Quantitative Tightening Been Paused?

This Week:

  • Gold Mining Shares vs Physical Gold Bullion – Which to Buy?
  • Why You Should Ignore the USD Gold Price When Buying Gold in New Zealand
  • Fed Holds Rates, Has Quantitative Tightening Been Paused?
  • Central Banks Buy More Gold in 2018 Than Any Year Since 1967

Prices and Charts

Change from last weeks gold and silver prices

Looking to sell your gold and silver?

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Buying Back 1oz NZ Gold 9999 Purity $1840
Buying Back 1kg NZ Silver 999 Purity $699

Gold Nears New Year High

Gold in NZ Dollars moved higher today care of a weaker Kiwi Dollar (more on that below). Gold is now back to the high reached at New Year. (Although this isn’t visible on the chart below as this dollar plunge happened after the closing price was added).

The pullback in gold has been surprisingly brief. After the strong run higher to end 2018, a deeper correction would have been expected. So this is looking promising for gold in the coming weeks. A break out may not be far away.

NZ Dollar Gold Chart

Meanwhile silver is actually down slightly on a week ago. But it too has touched on the overhead trend line yet again.

Silver will take its lead from gold. So if gold can break out decisively then silver should also follow. There is a lot of upside ahead for silver if a breakout occurs. Just to get back to the 2016 high would be a rise of 30%.

NZ Dollar Silver Chart

As noted already, the Kiwi dollar plunged this morning. It’s now sitting back on the 200 day moving average. The fall came after unemployment numbers came in at a higher-than-expected 4.3 percent in the fourth quarter.

While employment growth rate in the quarter was 0.1 percent, down from 1.1 percent in the previous quarter. Economists had predicted an employment growth of 0.3 percent.

NZ Dollar Chart

News Hub reported:

“The figures by Statistics NZ “add to signs that the economic momentum the Government inherited has ended, and the economy is now slowing”, National’s Finance spokesperson Amy Adams said.

“The unemployment rate is still relatively low; however we have now slipped from having the 9th to the 14th lowest unemployment rate in the OECD,” she said.

“At the same time, jobs growth has stalled and the underutilisation rate has increased.”

…The New Zealand dollar fell sharply to $0.6782 from $0.6825 immediately after the data was announced, and settled around a two-week low of $0.6773.”


So this news will likely have currency traders thinking the odds of an interest rate cut have increased. Therefore they are selling the NZ Dollar and buying the US Dollar.

NZ Dollar Gold Price vs US Dollar Gold Price

If this talk of currencies has you at all confused then check out this post.

It’s a common area for new investors to get bogged down in. Should you be following the US dollar gold price or the NZ dollar gold price?

Read on to see.

Why You Should Ignore the USD Gold Price When Buying Gold in New Zealand

Why You Should Ignore the USD Gold Price When Buying Gold in New Zealand

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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Gold Mining Shares vs Physical Gold Bullion – Which to Buy?

As noted above gold in NZ dollars is looking quite strong and possibly ready to break out to new multi year highs.

If this break out happens there is a lot of upside ahead for gold. See where these levels are and how far off a potential breakout may be.

Also check out what may be in store for silver.

Gold Mining Shares vs Physical Gold Bullion – Which to Buy?

Gold Mining Shares vs Physical Gold Bullion – Which to Buy?

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Fed Holds Rates, Has Quantitative Tightening Been Paused?

Last week the US central bank held interest rates. No surprise there. But what was surprising was their updated “balance sheet policy” after ‘extensive deliberations’:

  • The Committee intends to continue to implement monetary policy in a regime in which an ample supply of reserves ensures that control over the level of the federal funds rate and other short-term interest rates is exercised primarily through the setting of the Federal Reserve’s administered rates, and in which active management of the supply of reserves is not required.
  • The Committee continues to view changes in the target range for the federal funds rate as its primary means of adjusting the stance of monetary policy. The Committee is prepared to adjust any of the details for completing balance sheet normalization in light of economic and financial developments. Moreover, the Committee would be prepared to use its full range of tools, including altering the size and composition of its balance sheet, if future economic conditions were to warrant a more accommodative monetary policy than can be achieved solely by reducing the federal funds rate.

Source: Federal Reserve

On top of this the latest data shows the Fed balance sheet only shrank by $28 billion during January. This was only just over half of the $50 billion a month target.

To learn more about the Fed Balance Sheet reduction or QT, see: Federal Reserve Balance Sheet Reduction: What Impact Did it Have in 2018? What about 2019?

Ed Bugos from TDV noted this week:

“For now, [the Fed] is signaling that it will pause its balance sheet reduction and its rate tightening campaign.

Rate Probabilities

Rate Hike Probabilities Suggest QT is Over

In its last statement the Fed said,

“In light of global economic and financial developments and muted inflation pressures, the FOMC will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.”

The graph above is a screenshot from the CME group’s website imputing the latest probabilities for hikes in the Fed funds rate between now and the end of 2019 -based on the pricing of interest rate futures.

Here’s what it tells me. The market assigns a 71.2% probability for a pause in the rate hike campaign this year with a 5.5% chance of a rate cut. The market is imputing only a 20.7% chance for one rate hike, and less than a 3% chance of anything more this year. In other words, the Fed has finished tightening.

In fact, the odds of a rate cut exceed the odds of anything more than one more hike.”

The Fed announcement, January’s balance sheet data, and the above rate probabilities are perhaps evidence that Fed head Powell is caving in to the inflationists right before our eyes. It could be why gold, silver, and the miners rose so much in January.

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

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Central Banks Buy More Gold in 2018 Than Any Year Since 1967

The latest World Gold Council Gold Demand Trends for full year and Q4 2018 show that:

Central banks added 651.5t to official gold reserves in 2018, the second highest yearly total on record. 
Net purchases jumped to their highest since the end of US dollar convertibility into gold in 1971, as a greater pool of central banks turned to gold as a diversifier.”

Interestingly (and perhaps not coincidentally?) 1967 was the beginning of the breakdown of the world monetary system. A few months later, in March of 1968, the London GoldPool collapsed. Central banks would no longer try to keep the price of gold down. Nixon eventually ended dollar convertibility to gold in 1971.

The stage was being set for an explosion in the price of gold in the 1970’s.

Perhaps this central bank buying in 2018 is indicative of another breakdown in the world monetary system? And of another explosion in the price of gold to come?

Be sure to have your financial insurance in place before it happens. We have plenty of gold and silver deals on offer today while stocks last.

  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:

Gold Mining Shares vs Physical Gold Bullion

Thu, 7 Feb 2019 2:52 PM NZST

Quite a specific question in from a reader looking at gold mining shares vs physical goldbullion. “I’m interested to know if owning gold and silver mining shares or owning actual gold and silver products makes any difference if your goal is wealth creation? In the short term and in the long term which would […]

The post Gold Mining Shares vs Physical Gold Bullion appeared first on Gold SurvivalGuide.

Read More…

Why You Should Ignore the USD Gold Price When Buying Gold in New Zealand

Tue, 5 Feb 2019 4:15 PM NZST

Are you at all confused about the difference between NZD and USD gold price (and silver price)? Here’s a question from a reader wanting some clarity on NZ Dollar versus USD Dollar precious metals prices: I am a little confused about the difference between the NZD and USD pricing though. Can you explain how the […]

The post Why You Should Ignore the USD Gold Price When Buying Gold in New Zealandappeared first on Gold Survival Guide.

Read More…

China’s Slowdown Hits Australia – Could it Affect NZ?

Sat, 2 Feb 2019 9:21 AM NZST

This Week: China’s Slowdown Hits Australia – Could it Affect NZ? NZ Dollar Gold Breakout About to Happen? Why is a 1oz PAMP Gold Lady Fortuna Minted Bar Worth Less Than a Canadian Gold Maple Coin? Prices and Charts Looking to sell your gold and silver? Visit this page for more information Buying Back 1oz NZ Gold 9999 Purity $1846 Buying Back 1kg NZ Silver […]

The post China’s Slowdown Hits Australia – Could it Affect NZ? appeared first on GoldSurvival Guide.

Read More…

NZ Dollar Gold Breakout About to Happen?

Tue, 29 Jan 2019 5:18 PM NZST

Gold in NZ Dollars About to Breakout_In our daily prices alerts we’ve been continuing to track a possible breakout in gold in NZ dollars. Today we’ll have a look at how likely a gold breakout is, along with a look at silver in NZ dollars, and the New Zealand Dollar chart too. Gold in New Zealand Dollars Breaking Out? While NZD […]

The post NZ Dollar Gold Breakout About to Happen? 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
1kg NZ 99.9% pure silver bar 
1 Kilo NZ Silver Bar
$812 (price is per kilo for orders of 1-24 kgs)

$807 (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
1kg PAMP 99.9% pure silver bar
PAMP Silver
1oz Canadian Gold Maple 99.99% pure gold coin
Gold Maple
$2071    (or $2032 for 10 or more Backdated Year Coins)
1oz Canadian Silver Maple 99.99% pure silver coin
(Minimum order size tube of 25 coins)

Silver Monster Box
Tube of 25 $741
Box of 500 $13,984 (2018’s)
$13,931 (backdated other years)

(Fully insured and delivered)
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  • 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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Have a golden week!

David (and Glenn)
Ph: 0800 888 465
From outside NZ: +64 9 281 3898
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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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