– Thoughts on reports of large losses in gold by “investors” with Auckland bullion company
– Update on silver bullion in NZ dollars
– Something for beginners
Thoughts on reports of large losses in gold by “investors” with Auckland bullion company
You may have read some articles in the NZ Herald in the past week featuring some people who have lost money ‘investing” in gold with an Auckland bullion trading company. We have the odd question about this form readers.
While we don’t know any more about the company than what we’ve read in the articles, we thought it pertinent to write something on the risks of paper gold, which is what it turns out these people were “invested” in. So our headline article this week is:
The other article we have looks at demand for gold and how this might affect gold mining shares…
Update on silver bullion in NZ dollars
Just before Christmas we wrote an article contemplating whether it was a good time to buy silver.
We thought it was looking a pretty good time back then.
So how have things fared since?
Check out the updated 3 year chart below.
So far things have gone much the way we thought.
Although silver did drop further after we wrote from the $38 level, it did hold up around the next level of support we mentioned at about $34-$35.
As it turned out this level was reached right on New Year holidays when the bullion suppliers we use were closed, so it would have been even tougher to time the actual bottom.
Since then it has risen steadily to almost $42. Currently sitting at just over $40 as we write, it would not be surprising to see it dip a dollar or 2 more yet. Silver has also held above the long term rising trend line of the past 3 years.
Regardless of these short term machinations, in the long run our guess is these prices are likely to look cheap a couple years from now.
Something for beginners
“Why is the price to buy gold and silver bullion that you quote higher than the prices on your gold & silver prices and charts page?”
We get this question a bit from people new to the world of gold. While it’s somewhat answered on our FAQ page we thought it worth detailing further here. The charts on our gold and silver prices and charts page, show the NZ dollar spot price of gold and silver. So what is the spot price?
In simple terms the spot price is the cash price of a commodity like gold or silver, at a given time and place. It relates to large bars of metal stored in certified warehouses where usually just the receipt of ownership changes hands not the physical metal.
However, realise that when buying smaller bars and ingots, the spot price doesn’t include other costs that may be involved such as: manufacturing and minting costs for bars, ingots or coins; seller mark ups; storage costs; or delivery and insurance costs.
So this is why prices are quoted as “spot + 3.5%” for example.
(If you wanted the pedantic answer it would be that spot doesn’t actually exist. There is only “The Bid” – what someone is prepared to pay. And “The Ask” – what someone is prepared to sell for, and one has to meet the other. The spot price is just a theoretical price midway between the 2).
Also bear in mind that the spot price generally reported in the media is usually in US dollars. So when buying precious metals here in New Zealand the “spot price” is first converted to NZ dollars using the prevailing USD/NZD exchange rate and then the premium of say 3.5% for example is added to that. Here’s an article we wrote discussing this topic:
So you can track the NZ dollar gold and silver spot price on our prices page.
Plus there’s also historical charts of both on there too.
Use the charts on this page to keep an eye on what the spot price is doing and see when it’s dipped to get in at a good price.
But an indicative price to actually buy physical gold and silver is found in the banner at the top of every page of the website. (see image below)
This is the price including the mark up for manufacturing/production etc as explained above. This is updated every day and usually a number of times a day.
So if you’d like a definite quote you can check the price there, and then get hold of David by:
1. Email: email@example.com
2. Phone: 0800 888 GOLD ( 0800 888 465 )
Have a golden week!
Glenn (and David) Founders Gold Survival Guide
This weeks articles/videos:
Confusing Investing with Wealth Protection: The Risks of Paper Gold
You’ve likely heard of reports via the media of problems with missing investor money at an Auckland bullion dealing and trading company over the past week. We’ve had the odd question from readers about the situation. We don’t know any more about it than anyone who has read the newspaper articles such as the two […] read more…
A New Reason Gold Stocks Will Soar
We believe that first and foremost it pays to be positioned in actual physical gold. However the following makes a good argument for also having some positions in gold stocks or shares. While the gold mining shares have lagged the price of gold over the past year, history does say that the miners will likely […] read more…