Gold breaks out

Gold Survival Gold Article Updates

Mar 12, 2014

This Week:

  • RBNZ raises rates
  • Gold breaks out
  • Capital Gains Tax on Precious Metals in New Zealand – Is There Any?
  • Clamping down on cash transactions

 

This week our feature article is on the topic of tax on capital gains on precious metals in NZ.  See further down for that and other articles on the site. But first a look at what’s happening with the NZ dollar and gold and silver prices…

 

RBNZ raises rates

This morning the NZ Reserve Bank did as just about everyone expected and raised interest rates 0.25%. The governor didn’t say anything too earth shattering. Here’s the press release if you must. He tried to talk the high NZ dollar down a bit, but otherwise it was about how NZ and our trading partners are on the improve, risks of higher inflation and how the “speed and extent to which the OCR will be raised will depend on economic data and our continuing assessment of emerging inflationary pressures.”

The lengthy RBNZ monetary policy statement that is released quarterly also doesn’t offer too much – other than a cure for insomnia. This NZ Herald article outlines how they expect the kiwi dollar to remain high for longer. Only weakening slightly through to 2017.

Quite how they can even hazard a guess that far out is beyond us? Odds are they will be wrong about that. As we said last weekwe still think it makes sense to be concerned about a decent shock causing the NZ dollar to take a nasty fall at some point.

On a side note and in contrast to all the good news about NZ’s “Rockstar” economy there was a report this week that the government tax take continues to fall short, pushing the government finances to higher deficit. The deficit for the 7 months ending January was $1.06 billion more than twice the size of the $426 million deficit predicted three months ago.

The budget surplus in 2015 might be looking a little less certain now.

 

So how did the dollar react to the RBNZ statement?

You can see in this live streaming 5 minute chart on investing.com which we took a screen grab of, the kiwi dollar heading higher at 9am with the announcement.

NZD USD Chart

 

It rose about half a cent in the first 30 minutes and then has plateaued at about 0.8520. 

 

So the big question here is whether most of this good news story has now been priced into the kiwi dollar as we’ve mentioned a couple of times in recent weeks?

 

Will the NZ dollar top out around these levels or head higher as most of the analysis we’ve read lately says it will?

 

It is getting very close to the top of the wedge formation you can see in the chart below which we drew last week. 

NZD Chart

 

Gold breaks out

 

Meanwhile overnight offshore gold rose very strongly and has now broken though the significant US$1350 level. You can see in the lower half of the chart below (which shows the US dollar gold price) that $1350 was where the large fall in June last year began from. Now that it’s through this level it’s likely to attract more buying and so head higher from here we reckon. The fact that it has been a nice steady rise over the past two and a half months compared to the sharp rises of last year is also a good sign we reckon.

The stronger kiwi dollar dented the gains in gold for NZ holders of the metal. Although it is still up $15.37 or 0.97% to NZ$1606.37 from a week ago. Now that the US price of gold has gotten through $1350 odds favour further rises and so the NZD gold price will likely be pulled higher too, even if it might be at a slower pace should the NZ dollar continue to strengthen against the US dollar

NZD Gold Chart

 

Silver also rose strongly overnight. In US dollar terms it is again above US$21 and has stayed above the 3 month trading range it broke out of in February.

NZD Silver Chart

 

In NZ dollar terms it is not much changed from a week ago. Sitting at $25.06 today compared to $25.20 last week.

Unlike gold, silver is not breaking out to 4 month highs though. As we discussed on February 5th in Why is Silver Lagging Gold?, silver may well be lagging due to deflationary fears. You can see in the gold/silver ratio chart below that the ratio falls (i.e. silver rises faster than gold) during periods of significant monetary inflation. Take 2003 when Greenspan started to reflate post the dotcom bust and in 2009 when Bernanke did the same post the Lehman crash (see the red arrows on the chart).

Gold Silver Ratio

 

Currently we perhaps have fears of deflation – rightly so we’d say. Perhaps in response to this we will see an inflationary reaction by central planners. This Reuters report says that the ECB “is ready to use non-standard tools to deliver stable prices.” Central banker speak for money printing. 

So silver could well get a boost later in the year from this.

 

 

This Weeks Articles

 

 

 

Privacy: Are purchases of gold and silver in NZ reported?

Gold Purchases2014-03-05 22:46:45-05Gold Survival Gold Article Updates March 6,2014 This Week: NZ dollar looking toppy? Bigger news than the Ukraine situation? Privacy: Do purchases of gold and silver in NZ have to be reported?   Looking first at prices and charts – NZD gold is down $11.15 per ounce from a week ago or 0.70% to $1591. It […]read more…

 

 

 

Ten bagger2014-03-10 16:48:18-04Gold has risen quite steadily since the start of the year and mining stocks have actually led the way, most gaining much more than the metal itself. But if history is our guide, this is likely just the start of bigger gains to come. This article shows the eye watering rises that some mining stocks have had in past […]read more… 

 

Gold Is Seasonal: When Is the Best Month to Buy?

Gold Seasonal2014-03-10 17:34:40-04If you’re mulling over just when to buy gold then check this article out for sure. It crunches the numbers to show in which month the gold price is usually the weakest and shows how this is on average the best time to buy as it means a high chance of the price rising by the end […]read more… 

 

Capital Gains Tax on Precious Metals in New Zealand – Is There Any?

Capital Gains2014-03-11 21:06:20-04Last week we received a question from a reader on what tax is payable upon the sale of gold and silver bullion in New Zealand. They had just been reading an old article of ours: Windfall Tax on Gold | a New Zealand Perspective (which is a separate topic of whether governments might enact a windfall profits […]read more… 

 

HOW IT WILL END

How Will it End2014-03-12 04:49:05-04Darryl Schoon discusses how his favourite futurist Buckminster Fuller predicted a major financial crisis but how he also predicted a much better tomorrow to follow… HOW IT WILL END The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to […]read more… 

 

Clamping down on cash transactions

 

Last week we wrote about privacy and whether gold purchases need to be reported in New Zealand. In it we discussed the anti money laundering laws and how these might eventually affect gold and silver transactions. Well this week we noticed a story showing just how closely big brother is watching what you do with your money. A reporter learnt first hand how the new anti-money laundering laws affect cash transactions when her partner attempted to withdraw a wad of cash to pay for a replacement car at a Westpac Branch.

—– 

“My partner was informed that due to new money laundering laws he would be required to fill out a form in order to be granted access to his funds. Begrudgingly he did so. He was then asked where the money came from. Mike is a patient man but I could see that his cool, calm, façade was beginning to crack. The teller, clearly embarrassed, explained that he couldn’t give him the money until he knew where it came from. “I made it selling drugs,” said Mike. The teller smiled, as did a few others in line and there were murmurs of laughter.

The form and questions seemed as ridiculous as an American customs form. Are you a terrorist? It would have to be a pretty half-hearted terrorist that would confess because a form asked him to, likewise those making money in seedy ways aren’t likely to tick that box when a bank requests it.”

Source.

—–

This is similar to an international story that was doing the rounds earlier this year, where HSBC bank in the UK was also asking similar questions but wouldn’t actually allow withdrawal of a “large” amount of cash unless they were satisfied of the reason for the withdrawal.

Although a customer backlash later forced them to change their mind. 

Anyway back to New Zealand – in this case you’ll be pleased to hear the reporters partner eventually got his money out of Westpac after filling in the forms. The reporter finishes by opining:

—–

“I’m left wondering how and why it became so difficult to gain access to your own money. It seems slightly invasive that you have to declare to a stranger what exactly you’re spending your cash on, be it a new car, breast implants, on overseas trip or an exotic porn collection. Isn’t it your business and yours alone?”

—–

Yeah, if only. As with most reductions in privacy and freedom, it is usually the average guy in the street who is affected most. While the criminals will still find a way around the rules and regulations.

As we said last week this could be a good time to buy gold and silver while privacy still remains for these transactions – if that is of concern to you. Plus with the kiwi dollar close to record highs the precious metals make a good insurance policy against dollar weakness further down the track. Get in touch if you’d like a quote.

 

LATE UPDATE: The NZD has just risen a little further although so has the gold price so prices are not too different from below.

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

 

 

 

Today’s Spot Prices

Spot GoldNZ $ 1591 / oz

US $ 1337.55 / oz

 

Spot SilverNZ $ 25.20 / oz

NZ $ 810.35 / kgUS $ 21.19 / oz

US $ 681.26 / kg


7 Reasons to Buy Gold & Silver via GoldSurvivalGuide

Today’s Prices to Buy

1oz NZ 99.99% pure gold bar

1oz NZ Gold Ingot
 

$1628.33

1kg NZ 99.9% pure silver bar

1 Kilo NZ Silver Bar
 

$856.41
(price is per kilo for orders of 1-4 kgs)

$846.85

(price is per kilo only for orders of 5 kgs or more)

 

 

1oz PAMP Suisse 99.99% pure gold bar

PAMP Gold
 
$1691.69

 

1kg PAMP 99.9% pure silver barPAMP Silver 

 

 

 
$906.41

 

1oz Canadian Gold Maple 99.99% pure gold coin
Gold Maple
 
$1692.90
1oz Canadian Silver Maple 99.99% pure silver coin (Minimum order size tube of 25 coins)

 
Silver Maple
 

 

Silver Box
 

Tube of 25 $758.50
Box of 500 $14255

(Fully insured and delivered)

 

 

 

 

 


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

Note: Your funds are deposited into our suppliers bank account only. We receive a finders fee direct from them only.

 


 


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Our Mission
1.
To demystify the concept of protecting and increasing ones wealth
through owning gold and silver in the current turbulent economic
environment.

2. To simplify the process of purchasing physical gold and silver bullion in NZ – particularly for first time buyers.

 

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 © 2013 Gold Survival Guide. All Rights Reserved.

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2 thoughts on “Gold breaks out

  1. Pingback: Reader Question: “Why would a fall in the NZ dollar be a negative?” | Gold Prices | Gold Investing Guide

  2. Pingback: Gold Prices | Gold Investing Guide Currency Charts Indicate an Asia-Pacific Slow Down

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