Even at record prices, is it time to buy gold?

CORRECTION

There was a transposition in the fifth paragraph of the NZ Mint press release sent out earlier today. Please see the attached with the now correct sentence highlighted. We apologise for any inconvenience this error may have caused

Media release                                                                                        

October 7, 2009

Even at record prices, is it time to buy gold?

A combination of a weakening US dollar and the prospect of inflation are convincing commentators and punters alike there is still some upside in the price of gold for New Zealanders.

New Zealand Mint bullion dealer Mike O’Kane says that while gold is now at a record price of US$1,040[1], it is ‘cheaper’ to buy gold in New Zealand dollars than US dollars.

“The increasing value of our dollar against the greenback means the price in New Zealand dollars has remained almost static this year and if the US dollar firms there’s going to be some good upside in New Zealand dollar terms,” Mr O’Kane says.

“There will be a lot of commentators saying now’s a good time to buy gold because of the continuing weakness of the US dollar and the prospect of inflation following the recession.

“For example, at today’s exchange rate of US$0.73, an ounce of gold is going to cost you about NZ$1,425. If the NZ dollar was to drop so it’s worth only US$0.50, your ounce would be worth $2,080.  It’s that simple.”

Mr O’Kane says there are a number of predictions for the price of gold at the end of the year. “Some commentators are saying it will get to US$1,500 an ounce but we are not anticipating it will go that high yet.”

ends

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