When to buy a ticket for the gold train

Good news – gold up.  Bad news – gold up.

Over the weekend the reports were gold rose in line with riskier assets such as the broader stockmarket on Friday US time.

(Reuters) Gold rose 1 percent on Friday, breaking a four-day losing streak, as bullion moved in sync once again with riskier assets on optimism European leaders will be able to contain the region’s debt crisis.

Today gold is up sharply over $50, as are gold and silver mining shares, while the broader stockmarket is actually down, reportedly on the news that the Euro finance ministers summit has been cancelled.

So Gold is up on optimism and up on negativity.

We always find it amusing to hear the reason why markets have gone up or down on any given day.  Since when do the reporters have a direct link to market participants to ask them why they bought or sold today?  Seems more like un (un)educated guess to us.

So who to believe?

Ignore the noise

Don’t believe anyone we reckon when it comes to the day to day machinations but rather look at the big picture and see if any of the global factors which have lead you to buy or consider buying precious metals have changed.  If you want a reminder what some of those factors are check out this old article of ours from last year…

When will you know it’s time to sell gold

And let those be your guide rather than daily noise.

Gold in NZ dollars

Looking at the 6 month chart of NZ dollar gold we’d have to say it doesn’t look massively bullish in the very short term.  Making lower lows and lower highs since the start of September.  A guess could be that we are heading to test our old favourite the 200 day moving average again (red line).

Gold in NZD chart 6 months to 25 Oct 2011

Click image to enlarge

But with all the uncertainty in the world and Europe in particular at the moment you couldn’t count out a decent move to the upside.  But as we said above, checking in on “the big picture” shows a very nice looking 3 year graph of gold in NZ dollars.  Steadily rising to the right is the trend.

3 Year Gold Chart in NZD

Click image to enlarge

 

When to buy a ticket for the gold train?

An acquaintance the other day asked what we thought was the best method to take to buying gold if they wanted to buy but didn’t hold any yet.  Where is it going in the short term?  Our reply – “Beats us!”  “Not very helpful!” he responded.

We then went on to quantify that by saying he could consider what the total was he wanted to put into precious metals and purchase a third of that now.  Then look at buying the 2nd third on a pull back and take the remaining third and buy at an allotted time every month/ 2 months or some other fixed period over say the next year or another fixed period.

The advantages to this mixed method are that:

1. He is in the game and protected from any major moves up.

2. He has some powder dry on the sidelines – to mix metaphors – so he will be able to buy more if there is a fall.

3. By also buying regularly he’ll get a good overall average price for his holdings.  And importantly by buying on a set date this removes the emotion from buying.

Now we will wait and see if he goes ahead or remains sitting on the sidelines completely.

This week’s articles

This week we’ve got a video featuring Egon von Greyerz from Matterhorn Asset Management.  As we mentioned last week https://goldsurvivalguide.co.nz/the-psychology-of-buying-gold-and-silver/, we will be hearing von Greyerz speak in person 2 weeks from now at the Gold Symposium in Sydney so we thought this video was timely to share with you.

We’ll be reporting back to you after our trip to the Symposium to see what we’ve learnt from the line up of speakers, so keep an eye out for an update from us in a couple of weeks on that.

The other article we’ve got this week is from J.S. Kim and features his thoughts on gold and silver prices currently and whether now might be an opportune time to buy.

Links and intros at the end of email.

Canadian Gold and Silver Maples

Just a reminder one of our suppliers now has a steady source of Canadian Gold and Silver Maple coins that have been proving popular since coming on stream.  Most likely because they are very comparable in price to local coins, with the added benefit of being very recognisable and resalable the world over.

So if you’d like a quote or want more information on those give David a call on 0800 888 465 or email orders@goldsurvivalguide.co.nz.

Have a golden week!

 

Glenn (and David).

Founders

Gold Survival Guide

twitter.com/goldsurvival



Egon von Greyerz talks to James Turk
2011-10-25 04:29:04-04

Egon von Greyerz, of Matterhorn Asset Management, and James Turk, Director of the GoldMoney Foundation, talk about the state of the global economy and gold’s status as a safe haven. They discuss S&P’s recent downgrade of US debt and also talk about the situation in the UK and in Switzerland. They discuss the Swiss franc and how […]
read more…

The Hidden Truth About Gold & Silver
2011-10-25 05:33:42-04

Today we hear again from J.S. Kim, who we’ve featured in these pages a number of times in the past.  We’ve followed J.S. closely over the years and he has been an excellent timer of gold market tops and bottoms so he is definitely worth paying attention to we reckon. We just received this timely […]
read more…

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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