The Death of Term Deposits in New Zealand?


Prices and Charts

Change from last weeks gold and silver prices

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Gold Unchanged From Last Week

During the week NZD gold dipped down briefly below the horizontal support line at $2850. Before then moving higher Monday, Tuesday. The end result is absolutely no change from a week ago.

This dip below the support line ups the odds of a further move lower. Perhaps down to test the next support area which also happens to coincide with the rising trendline.

As always we can just wait and watch. If looking to buy consider buying a tranche at current levels and then holding some funds back to buy in case of any dip lower.

NZ Dollar Gold Chart

Silver Down 1% From a Week Ago

Silver fell below the rising trendline of the pennant or wedge formation during the past week. But it has also rebounded sharply, to be only 1% below where it was a week ago.

So far silver in New Zealand dollars has held above the horizontal support level around $34. But it remains in a downtrend in the shorter term. So we still have to keep an eye out in case of further correction. Potentially down to the 200 day moving average.

NZ Dollar Silver Chart

New Zealand Dollar Also Unchanged From a Week Ago

The New Zealand dollar dipped lower during the week but is back up. So like gold it also ended the week unchanged. The Kiwi remains below the multiyear downtrend line from 2014. But perhaps is trying to edge above it?

NZ Dollar Chart

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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Waiting on the US Election – Still – But Does it Matter?

It looks like investors are waiting on the outcome of the US elections before taking major moves into or out of the precious metals markets. Gold in particular has been largely in a sideways range since August.

We’ll stick by what we said last week. (See: How Will US Elections Affect the Gold Price? What If Biden Wins? How About Trump?)  We might see some reaction short term, sure. But in the long run whoever wins is likely to not have any real impact on what the precious metals markets do.

Why? Because a key driver will continue regardless of whoever is president.

That is, more “fiscal stimulus” (i.e. government spending and handouts) monetised by the US central bank and banking system.

It’s not likely to be much different down under. Even the Australian central bank (one of the last holdouts) has now joined the QE brigade. Along with cutting its key interest rate to just 0.1%.

Here in New Zealand today we have the biggest quarterly rise in unemployment ever – to 5.3%.

“Statistics New Zealand says the 37,000 rise in the number of unemployed to 151,000 is the largest quarterly rise on record; highest number out of work in eight years”


That wasn’t a big surprise given the lock downs. But neither was the response:

Kiwibank economists said policymakers would view the latest unemployment report for what it is – “confirmation we’re in a recession. More stimulus is required.”

So it seems a fair bet that currencies will continue to lose value – perhaps at an even faster rate.

The ongoing slow but steady death of the monetary system will continue to send more people towards gold and silver.

Ronni Stöferle made this point in the quarterly Incrementum Advisory Board Meeting last month. See point 3 below:

  • At the moment deflation is prevailing, but inflation is likely to become a topic again.
  • We don’t see excessive optimism in the gold market yet.
  • It seems like a new crowd of generalist investors are entering the gold industry.

Why Buy Silver? Here’s 21 Reasons to Buy Silver in 2020

These new “generalist investors” are likely to head into gold. But what about silver? Maybe not so much – or at least not to begin with. Larger investors will find silver too small and too volatile for them most likely.

But does that mean you should ignore silver?

Here’s 21 reasons why we think you shouldn’t…

Why Buy Silver? Here’s 21 Reasons to Buy Silver in 2020

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The Death of Term Deposits?

These “generalist investors” that Ronni mentioned above will be exiting other types of investments and moving into gold.

We may be seeing the first phase of this already in New Zealand…

What is the first phase?

People are moving out of term deposits. Perhaps not yet into gold and silver but more likely just into cash while they work out what to do next. Here’s some great analysis by David Hargreaves over at on the abandoning of term deposits in recent months:

“If we go back to February and the start of the Covid crisis the total deposits held by banks – that’s everything, including businesses and government – was $365.7 billion. As of September this had risen to $394.2 billion – which is a 7.8% rise in seven months.

Within this total figure, the total amount in savings accounts over the same period rose from $87.2 billion to $105.2 billion, which is a rise of some 20.7% across those seven months.

But the rise is even bigger when it comes to total amounts in transaction accounts – or money that’s effectively parked. It’s risen from $84.6 billion in February to $110.8 billion in September – a whopping 30.9%.

That, however, is ‘parked’ money that’s available at any time for the business or individual, whatever, to withdraw. How about term deposits?

Well, in total, including businesses and all, the amount held in TDs in this country peaked at $196.6 billion in August 2019.

In February this year the total amount held in TDs was just a little below the record level, at $193.9 billion. But since then about $16 billion has been pulled. As of September, the grand total was at $178.2 billion, which is a drop of 8%.

If we switch our focus to the householders and what they are up to, it appears the deserting of TDs is something that is only now getting under way in earnest.

Household term deposits also hit a peak in August last year, with $103.9 billion held.

Fast forward to February and the start in earnest of the Covid crisis and there was $100.9 billion held by households in TDs. Over the next few months the figures went up and down a bit, and by June there was again $100.9 billion. Since then what looks like the start of the exodus has begun, with the amount in household TDs falling around $4 billion, which is an around 4% fall. And the rate of withdrawal is increasing, with over $1.6 billion coming out of the TDs in September alone.”

There’s still plenty of money being ‘parked’ by households in transaction and savings accounts, but what that really means at this point is not clear. Household transaction balances have risen from $28.6 billion in February to $38.1 billion in September, while savings balances have risen from just under $55 billion in February to $65.2 billion in September.

It’s all going to be a case of watch this space.

With the RBNZ expected to announce next week details of a new Funding for Lending Programme (FLP) through which it will lend cheap money directly to banks and with the distinct possibility still that we will see a negative Official Cash Rate early next year the immediate prospects for TD fans look ever more grim.

So, is this the beginning of the end for conventional bank term deposits? It may seem so. What they end up being replaced with though, and what the longer term ramifications are for the banks are questions that lie ahead of us.

Certainly the days of being able to simply put money aside and live off the interest look long gone. And that’s going to require a process of adjustment.

These are indeed interesting times.”

Our bet is more and more will replace at least some of these term deposits with gold and silver “deposits”.

If you’re looking to do the same let us know if you have any questions on the buying process…

  1. Email:
  2. Phone: 0800 888 GOLD ( 0800 888 465 ) (or +64 9 2813898)
  3. or Shop Online with indicative pricing

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This Weeks Articles:

NZ Cash In Circulation Up Massively in 2020

Wed, 28 Oct 2020 11:34 AM NZST

Prices and Charts Looking to sell your gold and silver? Visit this page for more information Buying Back 1oz NZ Gold 9999 Purity $2736 Buying Back 1kg NZ Silver 999 Purity $1128 NZD Gold Down to $2850 Horizontal Support Line Again This week gold in New Zealand dollars is again touching the horizontal support line […]

The post NZ Cash In Circulation Up Massively in 2020 appeared first on Gold Survival Guide.

  Read More…

COVID-19 Makes Us Wonder: What Use Will Silver Coins be in New Zealand in a Currency Collapse?

Tue, 27 Oct 2020 5:09 PM NZST

The uncertainty brought about by COVID-19 highlighted the important role that cash plays in times of economic uncertainty. In a recent speech Assistant Reserve Bank of New Zealand Governor Christian Hawkesby commented on the massive increase in demand for cash in March: “During the weeks leading up to the March 25 pandemic lockdown, New Zealanders […]

The post COVID-19 Makes Us Wonder: What Use Will Silver Coins be in New Zealand in a Currency Collapse? appeared first on Gold Survival Guide.

  Read More…

Does the NZ Government Debt Matter?

Wed, 21 Oct 2020 8:27 AM NZST

Prices and Charts Looking to sell your gold and silver? Visit this page for more information Buying Back 1oz NZ Gold 9999 Purity $2793 Buying Back 1kg NZ Silver 999 Purity $1167 NZD Gold Bouncing Up Off Support Gold priced in New Zealand dollars bounced up off the support line at $2850. Getting back above […]

The post Does the NZ Government Debt Matter? appeared first on Gold Survival Guide.

  Read More…

What is a Troy Ounce? Troy Ounce vs Standard Ounce

Tue, 20 Oct 2020 6:04 PM NZST

What is a troy ounce? Why is gold and silver measured in troy ounces? Are they different from a standard or avoirdupois ounce? You’ll be an expert on the weights of precious metals by the end of this article… What is a Troy Ounce? The troy ounce is the unit of measure used for precious […]

The post What is a Troy Ounce? Troy Ounce vs Standard Ounce appeared first on Gold Survival Guide.

  Read More…

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.

  1. Email:
  2. Phone: 0800 888 GOLD ( 0800 888 465 ) (or +64 9 2813898)
  3. or Online order form with indicative pricing

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Have a golden week!

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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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2 thoughts on “The Death of Term Deposits in New Zealand?

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