Saving and Investing through Gold Buying

If the news hasn’t already garnered everyone’s attention with the sudden dive in of everyone trying to buy gold, then a simple reference to the current spot price for the precious metal should be sufficient to conclude gold is definitely in a run to break historical barriers this summer of 2020. All the dynamics and factors needed are in place to drive gold prices in New Zealand and elsewhere through the roof, and the fact that current economic instability continues to play fear in the global markets adds to the spreading investment fire.

Regardless of industry or trade sector, every area of the economy continues to be pounded with concerns of fallbacks, losses in spending, retraction and recession fears and desperate government stimulus spending. No surprise, investors who have already been noting the global economy was already overheated before 2020 arrived are pulling back and looking for financial safety to protect their current value as well as continue to keep adding gains. The current run on gold then makes for a prime opportunity to catch the train before it keeps running higher.

Why Gold and Not Some Other Investment?

In New Zealand and everywhere else, gold is a universally valuable asset. Government currencies could fall down tomorrow or become worthless, like they did right after World War I in Europe, but gold remains strong regardless. First, it is not connected to what governments do. Second, gold is universally accepted wherever one goes as being extremely valuable. Third, everyone wants gold when things are going wrong. Add in lots of geopolitical instability in Asia and the Pacific, and that drives the first three points even higher in terms of tension and anxiety.

Watching the Trends of Gold Price NZ Activity

Gold has been angling higher in prices for a quite a while. The rise started again notably in 2019 and really began to pick up momentum by March 2020 when economic shutdowns started being enforced. The fact that global markets also stumbled so quickly and so fast alerted many to how fragile the modern economy really is and how fast it can turn from fortune to financial disaster with computers. No surprise, gold and silver started to become very reasonable and practical as a safe harbor for folks early one to ride out the fluctuations being seen in market charts daily. That rush has been on for months now, continuing to build up more demand as a second wave of economic restrictions seem to be looming in July and August of 2020 now.

In particular, people have been focused more on physical gold and silver as well versus just electronic gold investing. Just to hedge a price point is simple enough. There are plenty of exchange-traded funds (ETFs) available that one can buy through a broker like a company stock. These ETF shares are traded daily and match fairly well against the spot price of Gold to the U.S. dollar. However, it is not real gold per se, and the ETF holding is simply on paper. If folks are indeed worried about institutional instability, it is apparent in how much of a run and premium demand there is for bullion and sovereign forms of gold and silver.

For example, New Zealand sovereign coin prices are averaging anywhere from 10 to 20 percent above the spot price value of major sovereign gold coins (Canadian Maples, South African Krugerrands, U.S. Eagles and Buffalo coins, and various U.K gold sovereigns). A one troy ounce gold coin has essentially risen from NZ $2,350/ounce to $2,930/ounce since January 2020. Additionally, government and established mints are being strained for production. At one point silver bullion bars could not be found anywhere globally; demand had completely outstripped any available inventory including stock in production phase.

Gold and Silver Bullion Dealers New Zealand

Watching the Trends of Gold Price NZ Activity

Gold has been angling higher in prices for a quite a while. The rise started again notably in 2019 and really began to pick up momentum by March 2020 when economic shutdowns started being enforced. The fact that global markets also stumbled so quickly and so fast alerted many to how fragile the modern economy really is and how fast it can turn from fortune to financial disaster with computers. No surprise, gold and silver started to become very reasonable and practical as a safe harbor for folks early one to ride out the fluctuations being seen in market charts daily. That rush has been on for months now, continuing to build up more demand as a second wave of economic restrictions seem to be looming in July and August of 2020 now.

In particular, people have been focused more on physical gold and silver as well versus just electronic gold investing. Just to hedge a price point is simple enough. There are plenty of exchange-traded funds (ETFs) available that one can buy through a broker like a company stock. These ETF shares are traded daily and match fairly well against the spot price of Gold to the U.S. dollar. However, it is not real gold per se, and the ETF holding is simply on paper. If folks are indeed worried about institutional instability, it is apparent in how much of a run and premium demand there is for bullion and sovereign forms of gold and silver.

For example, New Zealand sovereign coin prices are averaging anywhere from 10 to 20 percent above the spot price value of major sovereign gold coins (Canadian Maples, South African Krugerrands, U.S. Eagles and Buffalo coins, and various U.K gold sovereigns). A one troy ounce gold coin has essentially risen from NZ $2,350/ounce to $2,930/ounce since January 2020. Additionally, government and established mints are being strained for production. At one point silver bullion bars could not be found anywhere globally; demand had completely outstripped any available inventory including stock in production phase.

A Major Fraud Scandal Did Not Help Supply

A recent fraud scandal in gold holdings associated with a Chinese company did not improve the availability perspective of worldwide gold either. After 83 tons of gold associated with the company were found to be fake, institutional holders everywhere checked their inventory and braced for the impact to supply estimates for gold overall. That in turn created a social reaction for more “real” gold well-known to be authentic, ergo government-issued sovereign coins being among the best and safest standards available.

Sensing an overall level of anxiety about economic safety in general, many buyers are suddenly appearing for the first time, also looking for their first entry into gold. With a bit of research, folks are seeing both the news about the above fraud as well as pointers and guides focusing on bullion and sovereign gold as some of the safety beginner tools to work with. However, even with professional investors the principle is the same – people are looking for where to put their money where they know it won’t likely be jeopardizes by the ups and downs of a hectic market or the seeming instability of modern governments right now.

The Ceiling Point to Break

In May 2020 New Zealand gold prices broke their highest point at NZ $2959.71 an ounce. That said, the current fluctuations were driving gold closer and closer to that historic marker daily. Last week in July New Zealand’s spot price reached NZ $2918.00 an ounce. Silver has been on a similar trajectory, climbing rapidly as well but obviously at a much lower price point that its more valuable cousin. Why is the current gold price not just a bubble or momentary blip as it has been at times in the past? Much of the perspective that things are likely different has been the disconnect of gold from the movement of regular publicly-traded equities or stocks. Instead of running at the same volume, gold Auckland demand has been behaving entirely on its own drive, which was extremely noticeable in March 2020 when the equity markets plunged but gold held onto its ground and kept climbing. After that, gold should have dropped after the markets recovered in April, but it didn’t.

Once the major media and news got wind of what was really happening, that snowballed the popularity of gold and silver as well as other precious metals as many average folks started wondering if they should not diversify and move over as well. Whether it was the BBC or the New York Times, the chatter started running on the 24/7 news circuit and has not stopped since. A 28 percent rise in value since March 2020 will have that kind of effect.

How to Detect Fake Gold

Would Right Now Be the Top of the Market?

Some will argue August 2020 is the worst time to buy gold. Any major profit has already occurred and those buying in will only end up paying at a premium price level for gold that will eventually fall back down in price as it has in the past. These comments tend to be anecdotal and lack the statistical reference that any buyer should be very familiar with and is easy to find on the Internet.

The last big run in the prior 10 years occurred from 2010 until just at the end of 2011 when gold rose from NZ $1,600/ounce to as high as NZ $2,300/ounce. After that, a number of buyers who bought at the end of 2011 saw their holdings drop down to a low of $1,500/ounce by the start of 2014. However, if those same folks had held onto their gold instead of selling it in panic, that same drop would have then reversed in a steady climb. Even better, those who saw the opportunity to add in more holdings in 2014 have enjoyed a five-year increase path through the beginning of 2019 that reached NZ $1,900/ounce. At this point then, the excitement really takes off. From January 2019 forward, gold has been on a dramatic tear up to $2,959/ounce in May and currently positioned above $2,930/ounce at the end of July 2020. Just about every indicator and projection right now is making room for a much higher movement from there over the next few months, especially if the world continues to keep going through its instability gyrations economically. So, in short, yes, there were pullbacks, but there are far more investors who held tight and have been richly rewarded in the last six years as a result.

Higher Gold Prices in New Zealand are Here to Stay

The likelihood that gold price NZ levels will drop back down to their pre-2019 values is generally slim, at least for the next year or two. Even when gold did make its drop after 2011, that decline trajectory took another year to the end of 2013 before it really began to fall in earnest. So, folks will very much have a good amount of notice that gold market has reached its next zenith before a retraction kicks in again. Much of that investment hesitation tends to come from not being willing to liquidate gold holdings until there is a very solid platform of stability again in the general economy and markets. Until that proof is widespread and visible gold investment tends to be fairly conservative once a position is locked in, all of which is good news for investors getting started now for the first time in gold.

My Gold provides multiple channels for investors to begin a physical gold investment position or add to their current holdings efficiently and safely. Instead of taking the risk of only buying from unknown parties, gold Auckland buyers can work with a professional team that carries one of the most robust inventories of gold bullion as well as additional features and equipment for safe protection of gold assets as well. The train continues to move on NZ gold prices as well the overall likelihood of price increases into 2021. If you are considering a new move into gold, My Gold can definitely help cover all the bases.