|Spot Price Today / oz||Weekly Change ($)||Weekly Change (%)|
|NZD Gold||$1639.84||– $19.07||– 1.14%|
|USD Gold||$1172.49||– $0.86||– 0.73%|
|NZD Silver||$23.93||+ $0.59||+ 2.52%|
|USD Silver||$17.11||+ $0.60||+ 3.63%|
|NZD/USD||0.7151||+ 0.0078||+ 1.10%|
|Looking to sell your gold and silver?Visit this page for more information|
|Buying Back 1oz NZ Gold 9999 Purity||$1578|
|Buying Back 1kg NZ Silver 999 Purity||$734|
NZD gold edged lower again this week. It dropped below horizontal support at $1650. However it has now touched the rising trendline that stretches all the way back to 2014.
NZD Gold remains the most oversold it has been since the bottom in December 2015
Today we’ve also included a long term NZD gold chart. This even more clearly shows the NZD gold price is sitting just above the rising trendline.
As noted above the overbought/oversold RSI indicator is the most oversold it has been in a year. The previous two occasions where the RSI reached as oversold levels as this, NZD gold moved sharply higher soon afterwards (see the circles on the chart below).
Of course there are no guarantees this will happen again. Sure gold could move even lower yet too. However right now is likely the lowest risk/highest reward set up in a year for NZ gold buyers. There looks to be much more upside than downside from here.
The performance of silver this week has been very unusual. More often than not when gold is falling silver is falling too, often at a faster rate. However this week silver has moved noticeably higher while gold has fallen. You can see this in the Gold/Silver Ratio chart below.
Why is silver outperforming gold?
Beats us! But maybe since silver has fallen so much further than gold over the past few years there are just not any sellers left at these levels?
NZD silver looks to be trying to bottom out above $23, having risen 2.5% in the past week.
We’ve also added a longer term chart of silver in NZ Dollars today too. This shows silver still trending higher even though it has been falling since July. The chart also shows a rounded multi-year bottom looks to have taken place over the past few years.
The NZ Dollar has risen over the past week but is stuck between the 50 and 200 day moving averages for now.
Don’t expect any change to the current Reserve Bank of New Zealand (RBNZ) policy when there is a bank failure.[Not sure what the current policy is? Check out this article on why we will have bail-ins not bail-outs:
As we’ve written previously and as this scoop.co.nz story notes, “New Zealand is the only country in the OECD without deposit insurance”.
The head of the RBNZ says this is unlikely to change.
However there was a mention of a $5000 minimum guaranteed repayment. The first we’d heard of this:
So maybe a good reason to not keep much more than $5000 in the bank?
We’ve mentioned a while back the RBNZ’s plans to have a “dashboard” to highlight various financial measures and indicators for NZ banks. The idea being that the public can visit the RBNZ website and get a gauge on the relative risks between NZ banks. At a glance this seems like a good idea. Particularly when there is no deposit insurance, it behooves every depositor to know how their bank shapes up.
However Toby Fiennes, the Reserve Bank’s head of prudential supervision also noted that:
So while it might be a good idea to know how resilient your bank may be. There are a couple of considerations that may make this somewhat redundant.
New Zealand does have a highly concentrated banking system, made up of only a few banks.
Also perhaps the greatest risk to NZ banks would come from an offshore event, affecting the flow of credit into New Zealand (which we require given that we borrow more than we save).
The point being that if one bank was in trouble it would be highly likely that a number of them may be experiencing similar problems.
It’s worth reading the Interest.co.nz article on the dashboard as it also covers the OBR and deposit insurance too.
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We don’t buy the mainstream view that “the time was right”, or “family reasons” for the sudden departure of Mr Key. The TPP (thankfully) looks dead and that was to be his main focus this year. So perhaps that played a part. His mate Barack is gone too.
We don’t have another reason yet but it will be interesting to keep an eye on where he ends up for any clues. He succeeded in us becoming a more surveilled state, and in potentially becoming a greater target in the eyes of extremists. We wish more New Zealanders would take a more critical view of government. What it means and does and take less notice of the mainstream media view.
Before you write to complain – hopefully by now you know we are apolitical here. We are critical of politicians and bureaucrats of all stripes and persuasions!
On the topic of John Key’s exit, Kris Sayce of Port Phillip Publishing in Aussie probably has it right:
Yes indeed. It probably doesn’t matter who is prime minister or who is the ruling party for that matter.
Supposedly it would be used alongside of cash, rather than in place of cash.
Today we have another article looking at this development in more detail:
3 of the 4 articles on the website this week look at the goings on in Italy (see the end of this email for links to them). A couple were posted before the referendum over the weekend. This one since:
There’s a fair bit to happen in Italy yet but it does seem that they are heading in the direction of an exit from the Euro. Which would likely bring about the end of the EU.
Jim Rickards also looks at how a bail in is on the cards, not just in Italy but in Germany too:
If you still don’t understand what is going on in Italy then check out this very comprehensive article from John Mauldin. It outlines how they got where they are and what would need to be done to have any hope of getting them out of it. Our read is they don’t stand much chance.
A common theme today of bail-ins rather than bail-outs. Be they in Italy or in a failing New Zealand bank in the future.
Gold and silver stand as the only financial assets without any counterparty risk.
As we noted at the start of today’s newsletter, gold in NZ dollars is now just above the long term uptrend line. Since the election of Trump we have also seen the purchase of gold and silver here in New Zealand dry up sharply compared to the months previous. This is often a good contrarian indicator here in the West, where people prefer to buy when the price is rising than falling.
We wonder whether we will see a bounce higher from these levels now. That would make this a pretty decent time to buy.
Get in touch if you have any questions about the buying process. David is only too happy to answer them.
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Thu, 8 Dec 2016 10:17 AM NZST
The Italian referendum went as expected. A large majority voted not to enact any changes to the system of government. Their prime minister announced his resignation as he said he would. So what happens now and what will the impacts be on the European Union and the rest of the world?… The Next Domino Falls […]
Thu, 8 Dec 2016 10:00 AM NZST
Last week in our newsletter we wrote about how the Swedish Central Bank is considering the implementation of a digital currency. Supposedly it would be used along side of cash, rather than in place of cash. But as this article explains this is a slippery slope and points to everyday people having even less financial […]
Mon, 5 Dec 2016 4:35 PM NZST
See why the Italian banking system is a mile high house of cards and how a bail in may well be a possibility in the now too distant future… A Major Banking Collapse Looks Imminent By Nick Giambruno This surprises almost everyone… You don’t own the money in your bank account. Once you deposit money […]
Mon, 5 Dec 2016 3:39 PM NZST
Learn about the line up of events bubbling to the surface in multiple countries in the European Union currently. See why it’s not just the pending results in the Italian referendum due out tomorrow to worry about… After Trump, Brexit… December 4 is the Next Flashpoint in the Global Populist Revolution By Nick Giambruno On […]
Thu, 1 Dec 2016 6:52 PM NZST
ONE DAY GOLD DEAL With prices falling, as is often the case people aren’t buying. So today only we have a special from one of our suppliers who needs to move some gold. Today only for NZ gold 9999 purity: $30,000 plus at spot plus 2.5% (Normally $1719; today $1702) $100,000 plus at spot plus […]
|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.
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