Gold in NZ dollars was up $15 or 0.50% from a week ago. It remains well above the 200 day moving average and to our eye looks to be still building for a move up to (and maybe beyond?) the 2022 high of $3050.
While gold in USD has moved up further and today edged to a new high for this move up since November. Unlike NZD gold, USD gold remains overbought on the RSI and so is due a pullback. But this may be only brief. Why do we say that? We get the impression there is not much belief in this current rally. The $300 rise from $1625 in November has received little attention. On top of this there remains little interest in gold and silver from a retail perspective. These are exactly the conditions when gold often makes surprise moves. In USD terms we could see a run up towards the all time high of $2075 in fairly quick time.
Silver Doing The Opposite and Down for the Week
Silver in NZD this week did the opposite of gold and was down over 2%. In the last couple of days it even dipped briefly below the 50 day moving average. But today it sits right on that line. The 50 day MA has proven to be a very good buying zone since right back in September. So with the RSI sitting just below neutral (under 50) we could see NZD silver turn up again from here and challenge the blue downtrend line again. The odds are getting better that it might well break through that level and head to $40 even.
USD silver is also hovering just under its downtrend line. It might also be building for an attack on this line before too long.
NZ Dollar Continues the Uptrend Since the Start of 2023
The Kiwi dollar is up 1% from a week ago. Continuing the uptrend it has been in since the start of 2023. It is now at the highest level since June 2022. This may be the trend we see this year, with a higher NZD dollar meaning any rises in gold and silver will be smaller in NZD terms compared to USD gold and silver.
As we’ve said before it is a race to the bottom for all fiat currencies. With the NZD merely being one of the prettiest horses in the glue factory this year. So an NZD dollar that is stronger than the USD is not reason enough to ignore protecting your purchasing power with gold and silver.
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:
Should I Buy Legal Tender (Face Value) Gold and Silver Coins in 2023?
We mentioned in our weekly back on 7 December that silver coin premiums had been falling. Since then they have plummeted even further. For instance the premium above spot on the silver popular has fallen by over a third compared to what they were back as recently as November.
So with the possibility of a breakout in silver getting close, we think it is an opportune time to draw attention to silver coins.
In this week’s feature article we look at legal tender gold and silver coins. You’ll discover:
What is a “Face Value” Coin?
What is a Non-Circulating Legal Tender Coin?
Some Examples of Face Value Bullion Coins
How Do the Mints Arrive at These Coin Face Values?
In a Currency Failure, Would an Ounce of Gold Therefore be Worth Only 10 ounces of Silver?
In a Time of Hardship, Would a Country Limit the Spend of a Legal Tender Bullion Coin to the Face Value?
Remember, if you’ve got a specific question, be sure to send it in to be in the running for a 1oz silver coin.
NZ Inflation Remains at 7.2% – How Long Will it Stay High?
Stats NZ said today that the consumers price index increased 7.2 percent in the 12 months to December 2022.
The 7.2 percent increase follows another 7.2 percent annual increase in the September 2022 quarter, and a 7.3 percent increase in the June 2022 quarter.
ASB reports:
CPI inflation came out in line with the market consensus and below ASB and RBNZ pick. Non-tradable inflation also undershot expectations. Subsequent dovish market reaction – widespread NZD falls, a close to 10bp fall in the NZ swap yield and a trimming of OCR rate hike expectations – suggest that the market thinks the RBNZ will pare back the 125bps of rate hikes it had signalled for the next few months and join other global central banks in cutting rates before the end of this year. This could well happen given the emergence of more downside risks to the inflation outlook, but the problem facing the RBNZ at present is that annual inflation has remained stubbornly high, with increasingly widespread price increases evident and with domestic pricing pressures pronounced. This suggests that the RBNZ should not declare victory on inflation just yet and will push ahead with OCR hikes. We continue to expect a 75bp hike in February but acknowledge the risk of a more moderate pace of RBNZ hikes (including 50bp in February). Forthcoming local data for the NZ labour market (February 1) and for the RBNZ inflation expectations survey (15th February) will be pivotal leading up to the February 22 OCR decision. Increasing downside risks to the medium-term inflation outlook also suggest OCR cuts could be bought forward sooner than the August 2024 date we had pencilled in, but not until the RBNZ is confident that NZ CPI inflation will settle in the 1-3% inflation target range.
We think it may be a long time before NZ CPI returns to the 1-3% target range. As we keep saying this period in time seems to most closely resemble the 1970’s.
The bank and RBNZ economists still seem to think everything will return to normal in a year or 2 at most. However once money supply inflation appears in the prices of everyday goods it is likely to take a long time for this trend to change. Just as lower interest rates may also be a long way off.
Best to plan and prepare for higher interest rates and high inflation for a while to come. Worst case scenario if you prepare is you are wrong and rates are lower and prices are lower. Worst case scenario if you don’t prepare, your purchasing power is drastically reduced and your standard of living is lowered. The former is what we think likely awaits many people.
Don’t want to join them? Grab some gold and silver for protection and peace of mind.
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In this post you’ll learn all about legal tender gold coins and silver coins including: Here’s a question we received as a result of our 1 oz Silver Coin award. (See How to Win A Silver Coin Every Month for more details on this). Ross asks: Here’s a question for you that I cannot seem to find […]
It’s time for our annual review of the performance of gold and silver in New Zealand dollars. We’ll also look back on our predictions from the start of 2022. Then finish off by making a few guesses as to what 2023 might hold in store for us… 2022 was a terrible year for most investment […]
Prices and Charts Looking to sell your gold and silver? Visit this page for more information Buying Back 1oz NZ Gold 9999 Purity $2853 Buying Back 1kg NZ Silver 999 Purity $1151 NZD Gold Closing in on $3000 Gold in New Zealand dollars is up $18 from 7 days ago. It did get briefly […]
We’ve had the odd query from other New Zealanders asking, “how much gold does the Reserve Bank of New Zealand (RBNZ) actually have?” Today we delve into this topic in depth… Our guess is people are probably asking because since the 2008 financial crisis net gold purchases by global central banks have switched from negative […]
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.
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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.
