Prices and Charts
Looking to sell your gold and silver? Visit this page for more information |
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| Buying Back 1oz NZ Gold 9999 Purity | $3846 |
| Buying Back 1kg NZ Silver 999 Purity | $1431 |
Weaker Kiwi Dollar Holds NZD Gold Up
Gold in NZ dollars was down $17 from a week ago to $4036. Back close to the 50 day moving average (MA). So hitting the first buying zone now. We still think we are in the early stages of the next leg up.
While USD gold was down $35 (1.4%). Dipping back below $2500. Could dip down to $2450 and make a higher low. That also coincides with the 50-day moving average (although it’s not shown in the USD chart). But September is historically the weakest month of the year for gold, so always a chance of a slightly deeper correction. We’d be surprised if any correction lasted long though.
But NZD Silver Down 5.8%
Meanwhile NZD Silver dropped sharply, down $2.80 (5.8%) from last week. Didn’t manage to get above the 50 day MA. Still building for a retest of the highs at $52. We’d say it’s likely a good move to buy any dip near to the 200-day MA which currently sits at $43.69.
USD Silver dropped even more. Down a hefty 6.7% to $28.09. Again buying any drop to the 200-day MA looks to be a good long-term bet. Likely still building for a resumption of the uptrend.
NZ Dollar Down 1%
As mentioned above, the Kiwi dollar was down this week. Dropping 62 basis points or 1%. It looks like it has broken above the downtrend line in this wedge or pennant pattern. But after touching overbought on the RSI it might be dipping down to retest that line in the short term.
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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15 Reasons Add Some Shine to Your Portfolio in 2024
Gold has captivated humanity for millennia. But in today’s ever-changing financial landscape, is it still a wise investment choice? This week’s feature article dives into the compelling reasons why some investors flock to gold.
The article explores:
- Gold’s unique characteristics that make it a valuable asset, even in the digital age
- How gold’s historical performance suggests it can offer protection against inflation and economic turmoil
- The potential role of gold in diversifying your portfolio and mitigating risk
Curious if gold deserves a place in your investment strategy? This article sheds light on its enduring appeal and the potential benefits it can offer for a well-rounded portfolio.
Why Buy Gold? Here’s 15 Reasons to Buy Gold Now in 2024
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Long-Term Inflation Expectations: Consumer vs Fed
We keep repeating, but we believe over the past couple of years we have moved into a long term cyclical trend of higher inflation. We still stick to this even while inflation rates have been falling.This short post and chart shows that there is an interesting divergence among different measures of long-term inflation expectations:
1. According to the recent University of Michigan Consumer Survey data, the average US consumer believes that inflation will be 6.1% over the next five to ten years.
2. The Treasury Inflation Protected Securities (TIPS) market on the other hand indicates that CPI will be only 2.1% during that time as we show in the chart below.
This suggests consumers believe government CPI statistics will understate actual inflation in the future to a greater degree than ever before. Such a sentiment is understandable.
We think the recent historic divergence between these two time series is a measure of high government mistrust. So, if the Fed is claiming victory over long-term inflation expectations based on the TIPS market alone, we believe it has a lot more work to do.
Furthermore, since the central bank has just signaled a green light for interest rate cuts, we expect both consumers and the investment community to remain skeptical that the Fed truly has inflation under control.
Source
Then on a related note here’s a chart that perhaps shows that inflation expectations are about to bottom out. Implying that inflation may soon head higher. Meanwhile central banks are about to cut interest rates and therefore likely stoke inflation.
“Wouldn’t it be interesting if inflation bottoms out, but the Fed still has to cut rates to alleviate the government’s debt burden?
Two words come to mind:
Hard Assets.”
Source.
Close to a Rotation from Tech to Commodities?
Stock markets were down overnight. ASB notes that:
“In the US, the three main benchmarks are currently down between 1.7% and 3.4%. The Dow and S&P 500 were trading around all-time highs late last week, but it appears risk is getting taken off the table ahead of US labour market data over the rest of the week. In Europe the main benchmarks were down by less, but the Euro Stoxx 50 index still ended down 1.2%.”
As they point out, stock markets are not far down from all time highs. However, Crescat Capital highlights why they think we could be close to rotation away from Tech and into Commodities:
“Commodity equity bull markets can sometimes begin simultaneously with large-cap growth and technology stock busts. This happened before in the Nifty Fifty bust in 1973-74 and in the early 2000s.
The chart below from Bank of America shows how an equity bull market in energy, materials, and financials began at the same time as the 2000 tech and telecom bust was unfolding.
We think a similar rotation in favor of commodity equities is poised to unfold again today based on similar imbalances, positioning, and relative valuations to 2000.
The Great Rotation, one of Crescat’s overriding investment themes, which encompasses the potential investor transition out of overvalued large-cap growth equities and into undervalued energy and natural resource stocks, started to play out through all of 2022 as shown in the chart. However, new euphoria over AI has driven a complete retest of the former extremes creating a potentially even bigger setup opportunity.”Source.
Of course this rotation won’t start until Tech stocks take a decent dive. Is that still to come?
Gold’s Share of International Reserves: Heading back to 65% or Even 90%?
In this week’s feature article above we have a chart which shows gold’s share and the US dollar’s share of global international reserves. We point out that since 2014 the US Dollars share of global reserves has dropped from 59% to 49%. While Gold has increased from 10% to 19%.
A few months ago we shared a slightly different version showing the same thing over the past 120 or so years. Back then we were mainly looking at the current makeup of global reserves and the fact that at the end of 2023 gold’s share had overtaken the Euro.
But on a second look, perhaps the most significant feature of the chart is to see how gold’s share has changed over a longer timeframe. When Nixon severed the last tie to gold in 1971 gold had dropped to 40%. But by 1980 it had risen back to 65%. Then during most of the new millennium, gold’s share of reserves has only been around 10%. But around 2016 we can see a clear rising trend emerge. Is gold now heading back towards the 65% level? Or could it even return to the 90% from back in 1900?
This increase in share of global reserves will likely come about by two things. Central banks will continue to buy more gold. But also the price will continue to rise.
Source.
Ideal Allocation to Gold is 40%?
Ronni Stoeferle and the team at Incrementum have just released a new report: The Optimal Gold Allocation – How Much Gold Does Your Portfolio Need?
The most surprising part of this report? When just looked at solely from a performance perspective, an allocation of 40% to gold gives the best performance in a stock/bond portfolio over the last 54 years.
This is much higher than what we would even have thought.
“Bond investors are shocked as a 40% allocation to gold turns out to be ideal when optimized for performance.”
Source.
According to the numbers quoted earlier, Central banks currently have a bit under 20%, but are likely heading back to 65% or even higher. This is probably because they see gold as “Fallback Money” as this surprisingly good Bloomberg article points out:
Gold Is Rising Because of Demand for ‘Fallback Money’
The yellow metal’s strong performance may be down to its more fundamental properties.
While for stock/bond investors 40% gives the best return long term. What is your current allocation? Do you have enough?
Please get in contact for a gold or silver quote, or if you have any questions:
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This Weeks Articles:
Why Buy Gold? Here’s 15 Reasons to Buy Gold Now in 2024
Tue, 3 Sep 2024 10:53 AM NZST
“Haven’t gold prices gone up quite a lot in the last year or so? So why buy gold now? Isn’t […]
The post Why Buy Gold? Here’s 15 Reasons to Buy Gold Now in 2024 appeared first on Gold Survival Guide.
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7 Reasons to Buy Gold & Silver via GoldSurvivalGuide
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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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