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Archive for November, 2009

Gold Versus Silver Investment Part 1 of 2

November 25th, 2009 3 comments

Investing in gold is popular these days. People are investing in gold like never before, but a little known fact is that silver bullion investment is also gaining in popularity. Watch this short 5 minute YouTube video that explains the differences between gold versus silver investment.

VIDEO TRANSCRIPT

Hi, I’m Dr Marc Dusault, I’m here with the Managing Director of the Australian Bullion Company Mr Peter August and we’re sitting here with gold, and this is 105 ounces of gold bars and this is another ounce of a coin.  And I just wanted to show you what it actually looks like; and it’s actually as heavy as it sounds.

Now just so you can see, this is a regular blackberry mobile phone and we have a series of YouTube videos that explains why you should invest in gold.  But what I wanted to do in contrast, and I’m just gonna move the phone over here just so you can see the difference in size.  Again this is just a regular, this would be about the size of a 20 cents piece wouldn’t it?

Yes.

Okay, so a 20 cent Australian piece, and it’s actually you know very attractive because once again it’s a coin, whereas these are bars which have a little bit more of a rough texture.  But the contrast I want to show you is with silver.  Now this is 1 kilo which is about, it’s about all of this isn’t it?

One kilo is that.

Is that.  So this, is that.

It’s a dramatic difference isn’t it?

Yeah, it’s a huge difference.  Now this is silver and I, you have to sense how heavy this is and when you look at it it’s got that rough texture we talked about in the other YouTube video about bullion, and it’s stamped, and it’s actually when you touch it it’s got a really nice feel to it.  I want to show you another one, this one is how much, 5 kilos.

That’s correct.

Now I’m not gonna drop it from too high up okay, but… Read more…

Why you should invest in gold

November 24th, 2009 1 comment

Watch this short interview with Australian Bullion Company’s Peter August on why you should consider investing in gold. As Dr Marc Dussault’s interview reveals, gold prices have had quite the run as of late, but this candid interview reveals why the trend is not expected to be short-lived based on historical data.

VIDEO TRANSCRIPT: GOLD INVESTMENT: WHY GOLD?

Hi everyone, I want to thank you for taking some time to watch this YouTube video.  I’m Dr Marc Dussault and I’m here with Peter August of Australian Bullion Company.  And I just wanted to take a few minutes and ask him a few questions on why would anyone want to invest in gold.

And what we have here is some gold bars and some gold coins.  And as you can see I just have a regular blackberry mobile phone so you can see the difference in size.  First of all how much gold is actually on the table?

Well we’ve got 105 ounces altogether sitting here Marc.

So this is 20, 20, 20, 10, 10, 10, 10 and then…

Five 1 ounce bars. Read more…

Gold Price Update: TV Interview

November 15th, 2009 1 comment

The Australian Bullion Company‘s very own Peter August was interviewed on television recently. Watch the YouTube version of the interview to find out why the Gold Price is on the rise and why it’s expected to keep increasing based on expected global demand…

Peter August On The Gold Price

VIDEO TRANSCRIPT: GOLD INVESTMENT TV INTERVIEW

It has soared to record highs on news that India’s Central Bank has bought 200 tons of it from the International Monetary Fund.  The 6.7 billion dollar purchase over the last 2 weeks of October surprised the markets.

It was the biggest single central bank purchase over such a short period in the last 30 years.  The price of gold jumped by more than US$30 to an all time high of $1,087 an ounce.  The country has until now has been the biggest consumer of the precious metal, primarily because of its deep seated affection for jewelry and gold ornaments.  Experts say India’s interest in diversifying into bullion is a sign that gold’s run has only just begun.

For a while there had been a sort of a philosophy that gold no longer was relevant in a modern society, but with all the printing of money that is going on around the world gold has become the ultimate safe haven and has become the safe asset of choice, not only by individuals but by central banks.

The change of attitude appears to be due to a shift in strategy by investors to hedge against a weaker dollar and the threat of inflation.  It also heightens speculation that there may be more official purchases.

The Chinese we know are very worried about holding so much US denominated debt and cash.  You’ve got the Middle East petro dollars that need to be recycled into a store of wealth that they can rely upon.  There’ll be no shortage of takers.

The IMF plans to sell about 400 metric tons of gold this year in an effort to shore up its finances and increase lending to developing countries.  India’s purchase represents about half of that amount.  The question now is who will buy the rest of the IMF gold.

Neena Mairata, World News, Australia.

Gold Going To $2,300?

November 5th, 2009 No comments

Gold Surges To Record High <- Click here to read the article

What makes a bank note or coin rare?

November 4th, 2009 1 comment

Even though I own and operate the Australian Bullion Company, buying and selling gold, silver and precious metals, I’m also an expert at determining the quality and rarity of coins and bank notes, as well as appraising them for sale or investment.

I use this expert skill every day, sometimes I have to sort a rare coin out of a pile of regular coins.

Many people have jars or drawers full of old coins that they’ve had for many years, or have been passed down from generation to generation. I get several customers who come into my office with jars full of old coins that they hope are valuable. Out of hundreds of coins their might be one that is rare and/or in good conditon.

Every once in a while I find one that can be worth thousands of dollars!

There are many examples of rare Australian coins and notes. We’ve all heard of the holy dollar, that was Australia’s first coin, it was a Spanish dollar that they punched a hole in the middle, hence the name.

The part of the coin that was punched out is also a collector’s piece, called a ‘dump’. Dumps have ‘New South Wales’ printed on them. They were punched out so that coin would be ‘Australian’.

In the 1960’s you could have bought a dump for $165; even in the 1990’s you could have bought that same dump for $20,000 if it was in extremely fine condition.

If you wanted to buy one now it would cost you $210,000!

Yeah I know – you wish you knew then what I am telling you now.

That’s the whole point of this blog – to educate and inform you so you can start to make better investment decision regarding rare coins and bank notes.

Let’s continue with another example…

There are other classic examples such as a 1930 penny, a square penny or a 1937 penny. There are numerous examples of extreme rarities in the George the 5th period; that’s 1911 to 1936. That period has the most Australian coin rarities. There are some sovereigns that go back to the 1850’s, which certainly commands a high premium as well.

If we’re looking at where there’s a lot of investment upside potential right now, that particular period is a very, very good period.

It’s important to understand that coin and note rarity fluctuates with time and demand.

Many Australian’s visit the Australian mint in Canberra as school children, and return with newly minted five, ten, and twenty cent pieces. These coins are not rare, but someday might be.

If only around 2,000 of that type was minted, then in fifty or a hundred years there may only be about a handful that survive. Those surviving coins would be valuable if, and that’s the basis of appreciation IF there was only a few of them. PLUS if for some reason there was a high demand, the price would rise even more. That high demand might be because one investor starts to buy them up, essentially taking them out of the market, or several collectors knowing that scarcity will mean greater returns.

In terms of how they appreciate, it’s quite amazing. I’ve been in the game now over 20 years, since I was a boy, and you may look at something that at one particular time you saw several of them around then they’re gone.

Let’s go back to the dump as an example.

When I first started collecting coins, you could pick an average quality 1830 New South Wales dump for 2 or 3 thousand dollars. You could go to many different coin shops and you’d easily find 1 or 2 in each shop.

Fast forward 20 odd years later, that same coin in average condition is about $30,000; and you’d be hard pressed finding one in any coin shop. They get put away, you have that shrinking pool, and market forces then apply.

Bank notes appreciate in a similar way, but they are worth even more if they are in uncirculated condition because it is easier to disfigure notes. An uncirculated ten shilling note was worth $7.50 in 1957, $120 in 1976, and today it’s worth $9,500.

In 1967 there was a dealer that had three 100 pound notes, (we had notes actually up to 1000 pound denominations here in Australia) and he had three 100 pound notes.  He tried to get 10% over face value for each of those notes.  He couldn’t get 10% over, so he cashed them in at the bank at face value.  Now, if he had them today, each of those three notes would be worth a ¼ of a million dollars, in the condition that they were in!

Australian notes have the signatures of the Governor of the Reserve Bank and/or the Secretary to the Treasury printed on them.

Now, if there is one combination of governor and secretary that are together for only a small period of time that means the notes that were issued during their tenure are only circulated for a short period of time.

That actually happened in 1967 when Coombs was the governor and the secretary was Randolph. That particular combination only lasted for about six months because Combs then retired. Any top condition notes from that period command quite a premium.

Another form of rare notes is the ‘star’ note. The star notes were replacements for notes that had been spoiled, they had the original serial number, but with a little asterisk after it. Any star note is valuable, especially if it is in uncirculated condition. The combination of rare Reserve and Treasury signatures, along with a star, is a rare and very valuable find.

I admit that coins like the dump, the star, and the 1967 notes are unusual situations. For the most part, I recommend buying rare coins, waiting five to ten years for them to appreciate, and then selling them. I do not however recommend holding on to your average coin for forty years in the hopes that it will become valuable.

Stay tuned for more insights to help you make more money from rare coins and bank notes.