Why Will Gold Still be Valuable in the Future?

Prices and Charts

Change from last weeks gold and silver prices

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Consolidation Continues in Gold

Gold in NZ dollars is down about 1% on last week. Whereas in US dollars gold is up just over 2%. This difference is due to a sharp rise in the Kiwi dollar. More on that below. We stil can’t count out the possibility of a deeper correction. But so far gold has not fallen very far from the recent all time nominal highs. So it is looking promising for a sideways consolidation to wear off some of the heightened interest in gold. Rather than a bigger fall. NZ Dollar Gold Chart

Silver Outperforming Gold

Silver in New Zealand dollars was up about 3% on a week ago. While in US dollars it was up 6% – again due to the strengthening NZ dollar. Silver is holding up even better than gold, consolidating above NZ$40. NZ Dollar Silver Chart Since the start of August, gold is down almost 2%. While Silver is up almost 13% in the same period. This out-performance by silver is shown by the gold to silver ratio chart. It reached a new low this week under 70. So it only takes 69 ounces of silver to buy an ounce of gold. For silver to do so much better than gold during a correction or consolidation is quite unusual. Usually when the precious metals sector undergoes a correction, silver falls further than gold. Generally this is because silver rises much fruther further than gold in the prior run up. We’re not sure what to make of that exactly. Could it be signaling a change of fortune for silver after years of under-performance?

NZ Dollar Silver Chart

NZ Dollar Up Over 3%

As already stated the Kiwi dollar rose sharply this week. Up over 3% in fact. The chart below shows that the NZ dollar may be about to break out of the multi year downtrend it has been in against the US dollar. Although it’s a little early to be sure on this yet. This change in trend would simply mean the NZ dollar is joining just about every other currency in the world to be outperforming the US dollar at the moment. However just about all those other currencies are also losing value against gold and silver too. As we’ve said before, comparing fiat currencies is much like the prize for the prettiest horse in the glue factory. They’re all destined for the knackers yard, it’s just a case of which one drops first! 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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Where Are We in the Psychology of the Silver Market Cycle in 2020?

With silver outperforming gold over the past month, it is timely to look at where we are in the cycle of investor psychology towards silver. All markets go through cycles from depression to euphoria. Where are we currently for silver? What might come next? Find out in this weeks feature article. Along with a very interesting 40 year chart for silver…

Where Are We in the Psychology of the Silver Market Cycle in 2020?

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Why Will Gold Still be Valuable in the Future?

A good question in recently week from a reader:
“My biggest question is – why will society continue to value gold in the future? Besides its ornamental use, its use in society appears quite limited. What is the guarantee that society will continue placing value on gold going forward?”
Here’s our answer to her… Good question. Gold (and silver) have been valued by humanity for many thousands of years. Despite all the technological advances, we still think gold and silver make the best money for reasons outlined here:  What Good is a Bar of Gold When the Shelves are Empty? So we don’t see that changing. In fact we see the interest in gold most likely continuing to grow in the coming years. Perhaps even returning to the monetary system as we outlined recently here:  The Gold Standard & A Free Market For Money: How Could This Work? This other article may also be of interest to you: Societal Breakdown: Are Gold and Silver Coins Better Than Tradable Items Like Tools, Water and Wine? While gold may seem like it does not play a role currently, behind the scenes it is much more important than most people would realise. Despite doing their best to cast aspersions on gold, central banks the world over still own large hoards of gold too (although not our Reserve Bank!). Central banks went from being net sellers to net buyers of gold in 2010. This has continued ever since. Central banks like to make it sound like they hold gold due to “tradition” but the real reason is that it is a store of value and a hedge against all the paper (and digital) money the central banks themselves have created. Countries concerned about the US dollar have been buying large amounts of gold in recent years. Russia and China are the largest regular buyers, but many others such as Iran, Turkey, Kazakhstan, Mexico and Vietnam have been purchasing too. Much like we said about Warren Buffett recently, with central banks it’s a case of following what they do – not what they say. Most are holding, if not buying, gold. Perhaps you should consider the same?

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Exit Strategy for Gold and Silver Funds

Another question this week:
“Obviously, the price of gold will not rise forever. Holding a mutual fund that invests in gold and mines that is profitable at some point must be sold, What is the best strategy for selling theses shares?”
Here’s our thoughts… Good question. Some people will say that it is a good idea to have a stop loss in pace for timing when to exit shares. Usually a trailing stop loss is used. This means you decide on a percentage – let’s say 25% and as the share or fund rises, you move the stop loss up. So you will lose 25% but not more. This is generally a good strategy. However the trouble with gold mining shares and funds is they can be quite volatile. They are likely to go through periods where they could correct 25% or more but still be in a long term bull market – or uptrend. So in this case you would be stopped out early and potentially miss the gains to come. You could use an even larger size like 33% or even 50%. But a better option might be to use various measures to value when gold itself might be reaching full valuation. Then exit the gold funds at this time. This post highlights some of these measure to monitor: When Will You Know It’s Time to Sell Gold Also we have a financial newsletter we subscribe to for Chris Weber. He is a bit under the radar but has a definite “guru” sense of knowing when the big turns in markets are due. Especially gold and silver. For example, he got the peak in 2011 right and told people to lighten up on gold and silver then. He also went through the 1970’s bull market and got out at the end of that and moved into treasury bonds when interest rates were very high. So you may also want to consider a subscription to him. We have a deal for our readers with him which you can access here. Of course, before you can exit (likely some years away yet is our guess), you first have to enter the precious metals market. So please get in touch if you have any questions.
  1. Email: orders@goldsurvivalguide.co.nz
  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:

Where Are We in the Psychology of the Silver Market Cycle in 2020?

Wed, 2 Sep 2020 11:27 AM NZST
Where Are We in the Psychology of the Silver Market Cycle? This article looks at the phases of investor psychology in market cycles. Then compares these phases to the silver market cycle over the past 10 years or so, to see where the silver market is currently. Therefore helping to indicate where silver is going […] The post Where Are We in the Psychology of the Silver Market Cycle in 2020? appeared first on Gold Survival Guide.
Read More…

Paper Gold vs Physical Gold – What Should You Buy in 2020?

Wed, 26 Aug 2020 10:49 AM NZST
Buying the right type of gold is key. You have the choice between physical gold vs paper gold in its many varied forms. But how do you decide which type of gold is right for you? Is it paper gold or physical gold? The answer comes down to the main reason you are buying gold… […] The post Paper Gold vs Physical Gold – What Should You Buy in 2020? appeared first on Gold Survival Guide.
Read More…

Why Buffett is (Still) Wrong About Gold (Even Though He Just Bought a Miner) – But How He Loves Silver

Wed, 19 Aug 2020 10:52 AM NZST
Why Buffett is (Still) Wrong About Gold - But How He Loves SilverAugust 2020 Update: Buffett Buys GOLD The big news in the world of gold this week was that Warren Buffett’s Berkshire Hathaway bought GOLD. Yes that is in capitals for a reason. As GOLD is the stock ticker symbol for the gold mining company Barrick Gold Corp. Bloomberg reported that Berkshire Hathaway’s latest filings show […] The post Why Buffett is (Still) Wrong About Gold (Even Though He Just Bought a Miner) – But How He Loves Silver appeared first on Gold Survival Guide.
Read More…

A Warning If Waiting For a Bigger Correction

Wed, 19 Aug 2020 3:45 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 $2921 Buying Back 1kg NZ Silver 999 Purity $1322 Gold Bouncing Back – Up 4% Gold has staged a strong rally after the sharp correction last week. Gold is up about 4% […] The post A Warning If Waiting For a Bigger Correction 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: orders@goldsurvivalguide.co.nz
  2. Phone: 0800 888 GOLD ( 0800 888 465 ) (or +64 9 2813898)
  3. or Online order form with indicative pricing


7 Reasons to Buy Gold & Silver via GoldSurvivalGuide Today’s Prices to Buy
1oz NZ 99.99% pure gold bar 1oz NZ Gold Ingot $3006
1kg ABC 99.9% pure silver bar 1 Kilo NZ Silver Bar $1488
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1kg “Scottsdale Gold” Bar 99.99% with unique serial number $96,744
1oz 2020 Royal Australian Mint 99.99% Gold Coin $3101 – Phone or email to order
1oz Canadian Gold Maple 99.99% pure gold coin (2020) Gold Maple $3083
1oz Canadian Silver Maple 99.99% pure silver coin (Minimum order size tube of 25 coins) Silver Monster Box Tube of 25 $1288 Box of 500 $n/a  (Fully insured and delivered)
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Note:
  • Prices are excluding delivery
  • 1 Troy ounce = 31.1 grams
  • 1 Kg = 32.15 Troy ounces
  • Request special pricing for larger orders such as monster box of Canadian maple silver coins
  • Lower pricing for local gold orders of 10 to 29ozs and best pricing for 30 ozs or more.
  • Foreign currency options available so you can purchase from USD, AUD, EURO, GBP
  • Plus we accept BTC, BCH, Visa and Mastercard
  • Note: For local gold and silver orders your funds are deposited into our suppliers bank account. We receive a finders fee direct from them. Pricing is as good or sometimes even better than if you went direct.
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We look forward to hearing from you soon. Have a golden week! David (and Glenn) GoldSurvivalGuide.co.nz Ph: 0800 888 465 From outside NZ: +64 9 281 3898 email: orders@goldsurvivalguide.co.nz
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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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