How to Invest in Gold NZ: A Complete Guide

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Wondering how to invest in gold in New Zealand? Gold Survival Guide is here to answer all your questions!

There are several reasons to invest in gold; perhaps the most compelling is as a hedge against inflation. However, investing in gold also provides security during periods of economic and political instability. While the price of gold fluctuates according to supply and demand, the price of gold will never fall to zero, and gold will always be worth something. Gold is used by central banks and financial organizations to protect against inflation and uncertainty, so why don’t you as well?

Gold Survival Guide’s mission is to educate gold investors to help them protect their wealth with gold. If you are new to gold or not sure where to start, contact our specialists today, and we will walk you through it.

Why Invest in Gold?

Perhaps the best reason to invest in gold is as a hedge against inflation. For example, in 1970, an ounce of gold was worth $35; and either the ounce of the gold or the $35 was enough to purchase a new suit. Today, that same $35 from 1970 has seen its value eroded by inflation. However, that same ounce of gold from 1970 is still enough to purchase a new suit.

Gold is also useful as a hedge against political or economic uncertainty. Whether it is COVID-19, the 2008 global financial crisis, or tensions in the Middle East, gold has historically been a safe haven to protect your wealth and ride out the uncertainty. According to the Motley Fool, during the 2008 global financial crisis, the S&P 500 fell by 36%, while the price of gold increased by 25%. During the 2020 COVID-19 stock market crash, the Dow fell by around 30%, while the price of gold rose by 28%.

Gold is also a popular investment to protect against currency devaluation. Currency devaluation can occur when countries decide to devalue their currency, spend too much to stimulate the economy, or devalue their currency to make their exports cheaper. If you are living in a country whose currency is devalued, you will be pleased to be holding gold, as its value will hold and usually increase.

Gold’s ability to hold its value during economic and political instability, and its independence from factors that influence other investments, make it the smart choice when looking to diversify your portfolio, guard against inflation and currency devaluation, and protect your wealth.

Gold Price and Analysis

How the Price of Gold Is Determined

Like other commodities, the price of gold is determined according to supply and demand. The greatest demand comes from the jewellery industry (50%) and then from direct physical investment in gold (40%). The electronics industry makes up the remaining 10%. The demand for jewellery typically remains constant, while demand from investors, including central banks, tends to increase during times of economic and political uncertainty and decrease during times of stability.

In recent years the supply of gold has been slowly going down; however, most experts claim around 20% of below ground stock of gold reserves is still left to be mined. Advances in technology or a substantial increase in the price of gold may also increase supply, as more gold is able to be found and extracted.

The Spot Price

The gold spot price refers to the cash price for gold, set by the market at the time of purchase before being refined. However, investors should note that the spot price will almost always include additional charges, such as dealer margins and handling fees. For example, you may see the price of gold quoted as ‘spot + 3.5%’.

Live Data and Analysis

Gold Survival Guide provides guidance and coaching for people who do not know where to start or want to learn more about gold market analysis. Live charts are provided through the Gold Survival Guide website to learn, research, and monitor your investment.

For additional information, the US Money Reserve offers five tools to help track gold prices and analyse the market; Gold Bullion Suppliers lists their top three websites for gold prices, as well as educational content to help you understand the gold market.

Time to Buy

Like the stock market, there is no absolute way to know when to purchase gold, but there are effective and timeless techniques and indicators that Gold Survival Guide will assist you with to limit the risk and identify the best time to buy.

For further information, see Gold Survival Guide’s When to Buy Gold or Silver.

Options to Invest in Gold

There are several ways to invest in gold, from buying physical gold to shares, ETFs, mutual funds, certificates, futures contracts, and streaming and royalty companies. Each investment option comes with trade-offs and will depend on individual circumstances, risk appetite, and investment goals. The Motley Fool lists these investment options in more detail.

Gold Survival Guide recommends buying physical gold in the form of bars and coins, as they are portable, divisible, durable, and generally accepted worldwide. An ounce of gold is an ounce of gold no matter where you are. Physical gold is also owned by you and not connected to a central banking system, and unlike fiat currencies and other forms of investment, the price of physical gold will never go to zero.

We recommend buying physical gold.

The Risks of Investing in Gold

Fake Gold

Unfortunately, there is an active counterfeit gold market, which means investors must be wary of buying fake gold. Typically, fake gold is sold through second-hand dealers or resellers. Most fake gold comes in the form of large 1 kg cast bars, as smaller gold bars and coins are easier to identify as being counterfeit. Purchasing gold from reputable and trustworthy sellers, and being wary when buying large gold bars, should protect against the risk of purchasing fake gold.

Theft

When holding physical gold, investors must also be wary of theft. To keep your gold safe and secure, it is recommended that you store your gold in a home safe, bank deposit box, or vault. Gold Survival Guide has many resources available to help determine the storage method that is safe and right for you.

Where to Store Gold?

Most gold owners store their gold in either a bank safe deposit box, a home safe, or secured vault storage. There are pros and cons with all of these options, so it will largely come down to your personal preference. You will need to consider if you want to insure the gold and the cost of insurance. Other factors to consider include the size and value of the gold.

Gold Survival Guide can assist with safety deposit box storage, home safes, and overseas storage options, as well as transportation of the gold.

Where to Buy Gold in NZ?

Keen to buy gold? Visit Gold Survival Guide’s online store now!

Conclusion

Gold has a long history of protecting wealth from inflation and economic and political instability. There are several ways to invest in gold, and Gold Survival Guide is here to talk you through them.

Contact us today to get started with gold and ensure your wealth is protected!

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