|Spot Price Today / oz||Weekly Change ($)||Weekly Change (%)|
|NZD Gold||$1855.68||– $46.91||– 2.46%|
|USD Gold||$1346.85||– $11.60||– 0.85%|
|NZD Silver||$27.85||– $0.75||– 2.62%|
|USD Silver||$20.22||– $0.20||– 0.97%|
|NZD/USD||0.7258||+ 0.0118||+ 1.65%|
|Looking to sell your gold and silver?|
|Buying Back 1oz NZ Gold 9999 Purity||$1795|
|Buying Back 1kg NZ Silver 999 Purity||$858|
We’ve got half a dozen articles on the website this week so we will try and keep the newsletter brief so you can get to those all linked at the end as usual…
Both metals are down sharply on last week by around 2.5%.
Looking at the charts though shows we are still in the same sideways trading pattern we have been for over a month.
Gold in NZ dollars remains stuck in the range between the 50 day moving average and $1925. It has been making “higher lows” all month but thus far hasn’t managed to get above that elusive $1925 level.
Silver had a sharp fall and dipped below one of the rising trend lines. But continues to consolidate between $27.50 and $29.00. Holding up remarkably well.
The NZ Dollar was the big mover today. With the RBNZ “only” cutting interest rates by 0.25% this seemed to surprise many who were expecting a 0.50% cut. As a result the Dollar jumped sharply back up to 0.73 following the announcement.
To our mind there was more interesting news than the rate cut itself.
ANZ announced they would only be passing on one fifth of this cut to their mortgage holders. A 0.05% cut. But they would then be increasing deposit rates by up to 0.3%.
Their rationale for this was that it would help customers grow their savings:
How altruistic of them! But we have serious doubts that a desire to help their customers is is the real reason.
Perhaps a more likely reason is one we saw mentioned earlier this week, when this same situation occurred in Australia.
We have read about the increased cost of wholesale offshore funding recently. Even in the face of falling interest rates. Along with the rising cost of credit default swaps (insurance against default) in Australia and NZ
So perhaps this could be a reason for the move by ANZ here as well? Maybe the cost of offshore funding has risen for the ANZ too?
We’ve reported before that the level of NZ banks wholesale offshore funding has fallen compared to 2008. But from memory this figure is still just under 30%. And given our ongoing current account deficit where as a nation we spend more than we produce, it simply cannot disappear, as we require funds from offshore to keep the merry-go-round turning.
(Note: This article also looks at other possible reasons (none good) why the Aussie banks raised deposit rates after the recent RBA rate cut. Worth a look. Australia’s WTF Moment)
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There is more talk here lately that the central bank monetary policy is broken, but what should we do about it?
Our answer remains a simple one. Get rid of central banks altogether and then we won’t need “monetary policy”.
But that is not likely any time soon so what is?
This article is not dissimilar to many overseas we’ve read in recent months where the theory is that we should just not worry about inflation:
Odds are this “growth targeting” is what eventually leads to “helicopter money”. That is debt being monetised to fund infrastructure spending. Or rather money printing that the government spends rather than it being dished out to commercial banks.
Another article hints that perhaps this might be the government answer too:
The author a senior lecturer in economics at the University of Auckland also points out that:
Take heed indeed.
Speaking of inflation, the below linked article does well in explaining how inaccurate the measures of inflation in NZ are anyway. And why we probably don’t really need any more of it than we have already. An opinion that is in the distinct minority amongst financial commentators.
Here’s a thought that just popped into our head tying all this together.
With the ANZ raising deposit rates and their head “encouraging” people to save money in the bank.
Maybe people will?
Then maybe the central planners do away with “inflation targeting”, change to “growth targeting” and then finally unleash the inflation. So the good little people will be trying to save only to then see their savings rapidly eroded?
Here’s why the New Zealand Dollar is still rising even after a 0.25 interest rate cut by the central bank today. The Daily Reckoning reports:
New Zealand government bonds are included in that 17% that “yield more than 1%”.
So despite the Reserve Bank’s best efforts the dollar remains up. They will continue to try and talk it down, but there is a lot of money across the planet searching for anything resembling a yield. It will continue to find it’s way down here most likely.
But in a world where only 40% of government bonds are positive, this money will also flow into gold. Because while gold doesn’t yield anything, zero is much better than negative! More and more people are slowly realising this.
But we have a long way to go yet. The below chart of world asset values shows gold is still extremely under-owned at less than 0.5% of financial assets.
Eventually many more will move into gold and silver. It would be a good idea to get yours before they do.
If you’d like to follow Jim Rickards advice from last week and grab some silver coins to stash away just in case, we still have a couple of options.
There are still around 2500 silver fern coins available at lower than normal pricing of spot + 15%. Refer to the start of this email
Or Royal Canadian Mint 1oz silver maples. There is free shipping on boxes of 500 x 1oz Canadian 9999 purity Silver Maples delivered to your door via UPS, fully insured until you sign for them.Price today is $16,310.
Delivery in approx 7-10 business days.
Lastly, don’t forget to check out all the articles posted on the site this week linked below.
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Thu, 11 Aug 2016 9:53 AM NZST
Check out this historical evidence that shows not only how much higher gold could go, but just as importantly how low it could fall and still not really matter in the long run… This Important Chart Shows Why Gold Could Hit $6,000 by 2019 By Justin Spittler Editor’s note: Today, in place of our usual […]
Thu, 11 Aug 2016 9:44 AM NZST
In this piece Jim Rickards hints at what he thinks might cause a much higher run in gold without actually covering it specifically. Read on to the end and we’ll be back to fill you in… The market has the technical setup for the greatest gold shock in history. When it rocks markets, gold will […]
Wed, 10 Aug 2016 1:17 PM NZST
For the second week running we have Stewart Thomson with his Graceland Updates pointing out why inflation may actually be the risk people should be concerned with… Graceland Updates By Stewart Thomson Gold price bulls and bears may all be getting a bit frustrated now, as gold refuses to follow their predicted paths, and […]
Wed, 10 Aug 2016 12:38 PM NZST
The Bank of England – one of the world’s biggest central banks – just swung its “sledgehammer” in response to the volatility and shock caused by the recent Brexit vote. Learn about what else may yet happen in Britain and the impact this is having on gold… Why Doug Casey Thinks We Could See $5,000 […]
Wed, 10 Aug 2016 12:01 PM NZST
Here’s a historical comparison that shows even after large gains there can still be much more to come in gold mining shares… After 100%+ Gains, Is It Too Late to Buy Gold Stocks? By Justin Spittler Editor’s note: Yesterday, we told you that there are huge money-making opportunities in the gold market that are staring […]
Mon, 8 Aug 2016 7:55 PM NZST
A seventh big name investor recently began singing the praises of gold. Read on to see why and how to follow his lead. Plus a chance to learn how to select gold stocks that may seriously outperform gold itself… Don’t Buy Another Gold Stock Until You Read This By Justin Spittler Today is a very special […]
Thu, 4 Aug 2016 6:36 PM NZST
This Week: Reader Sentiment: Contrarian Indicator Silver or Gold? Why Cutting Interest Rates Doesn’t Work Reader Theories on the ANZ Chief’s Housing Warning LATE UPDATE: Spot prices have dropped a little So Gold Kiwi’s are now $1964 Silver Ferns are now $1300 for 2 tubes of 20 Prices and Charts Spot Price Today / oz […]
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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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