Perfect time for Kiwis to invest in gold

Perfect time for Kiwis to invest in gold

Go for gold. That’s the advice from a local precious metal expert who says the current weak US dollar makes gold an excellent investment option for New Zealanders.

New Zealand Mint director Mark Sutton says the resilient Kiwi dollar combined with Middle East strife, raging stock markets, increasing demand and a nervous investment community are all factors driving the flight to gold.

Gold is up from less than US$300 an ounce in 2001 to US$690 (NZ$934) per ounce today[1] and some international analysts are predicting a rise to more than US$1,000 (NZ$1,352).

Traditionally gold has been the place of comfort when other investments go awry. That remains a sound investment tactic according to New Zealand Mint.

But Mark Sutton says local investors have an added advantage right now – the strong New Zealand dollar makes it an excellent time to invest in the precious metal.

“Because the currency unit for gold trading is the US dollar, the rising exchange rate tends to flatten out the increase in the price of gold in New Zealand dollar terms. Then, when the US dollar drops, the price of gold in New Zealand dollars rises.

“And it was only four and a bit years ago that the New Zealand dollar bought just 41 cents American – at that rate, an ounce of gold would cost you NZ$1,683 versus NZ$934 today. That’s an 80 per cent gain if the Kiwi drops to those levels again.”

Mr Sutton also says many New Zealand investors are unaware they can easily, and should, invest in gold if only as part of a diversified portfolio.

“Gold is a different class of asset and there’s no bad time to buy.

“There’s a lot of rhetoric about gold being the haven you head for during uncertain times and that is certainly one good reason. But there are others, and we say there is no bad time to include gold in a balanced investment portfolio.”

New Zealand Mint says the precious metal is an ideal way to diversify an investment portfolio and a good hedge against inflation. It suggests gold should make up between five and 10 per cent value of any portfolio.

Other factors driving the gold price include a diminishing supply Mr Sutton says.

“Dubai and China have opened their own gold exchanges to investor trading and those two countries alone are gobbling up 400 tonnes of gold every year out of an annual production total of 2,500 tonnes.

“Plus, industry is starting to use more gold – there’s a skyscraper in Canada that has 200kg of gold in non-reflective windows – and there are seasonal demand fluctuations. For example, the upcoming Indian wedding season will see about 900 tonnes of gold gifted as dowry.”

It’s easy to buy gold in New Zealand – the mint produces Gold Kiwi coins in sizes from 1/30th of an ounce up to one troy ounce. It also sells gold ingots, other coins and gold jewellery.

About New Zealand Mint: New Zealand Mint is New Zealand’s sole precious metal mint and has been minting legal tender commemorative coins, gold and silver bullion for more than four decades. New Zealand Mint is among the first mints world-wide top adopt the .9999 gold purity standard. Its world famous Gold Kiwi and Silver Fern bullion are highly sought by investors. Visit the mint at www.newzealandmint.co.nz

ENDS

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