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Eddi McGuire Celebrates Million Dollar Hot Seat Anniversary with ABC

June 10th, 2014 No comments

Eddi McGuire

 

To celebrate Million Dollar Hot Seat’s 1000th episode airing tonight, Eddie McGuire immersed himself in some of Australia’s finest Gold bullion. Help secure your financial wealth with investment grade bullion by contacting us today. Picture: Mark Stewart Source: News Corp Australia

 

 

Is Silver A Better Investment Than Gold?

September 11th, 2012 No comments

Investing in bullion and precious metal has proven extremely lucrative in recent years, with the investment beating out almost every other vehicle in terms of yield.  Everyone has heard about the astronomical price that gold has risen to; but have you considered silver?  Which is the better between the two, in terms of investment potential?

Of course, no piece of investment advice applies to every situation, but you may want to keep these three considerations about silver in mind:

  1. Lower per unit cost

Since silver costs significantly less per ounce than gold, you can buy more of it for the same amount of capital investment.  This means that you can realize greater gains on your investment over the long term.  The price of silver is inherently volatile, so you have a lot of opportunity to take advantage of this with a low unit cost on the metal itself.

  1. Exciting new industrial uses spur demand

There have been all sorts of interesting new industrial applications for silver, which will spur demand for it for years to come.  It has the highest conductivity of any metal for both electrical current and thermal heat.  It also has the ability to kill bacteria without harming healthy cells, which has brought it into prominence for medical applications.

  1. Silver to gold ratio remains advantageous

Historically, based on the relative rarity of the two metals in the crust of the Earth, the price of gold should be approximately 16 or 17 times higher than the price of silver.  As of the writing of this article, gold is just over $1,600/oz., and silver is just over $30.00/oz (Note that prices will vary: Check out the latest spot prices here).  That is a ratio of over 55:1; so the shrewd investor can see silver is an incredible bargain currently.

Now, this isn’t to say that silver is always a superior investment to gold, because it isn’t.  Gold has a certain safety that silver doesn’t have, and the market certainly doesn’t have the same kind of volatility.  While silver can gain value extremely quickly, it does drop in value equally quickly at times; so you need to be aware of this if you decide to invest into silver. Generally, the best strategy is to diversify your investment into a range of metals, including both gold and silver.

Speak with a qualified investment professional to help provide you education on how best to invest your money into precious metals.  Make sure you take advantage of the great potential returns and relative safety of this fantastic investment instrument.

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A Beginner’s Guide to Buying Gold

July 14th, 2012 3 comments

Gold is a popular investment for many people for a range of reasons. Gold holds its value well over time, and it’s often a secure investment choice in uncertain times. To buy gold as a beginner, it’s a good idea to check your own motivations for investing in gold and to know more about the options that are available.

Motivation and Strategy

Clarifying your motivation helps you to formulate an appropriate strategy.

  • Do you want to buy gold to hold wealth or to create wealth?
  • Is your strategy geared toward shorter term speculation, long term investing, or saving?
  • Are you taking a long term or a short term focus for your financial strategy?
  • Are you thinking of buying gold to diversify your portfolio?

You might have another motivation for buying gold, but all of these are valid reasons to buy gold bullion as part of an investment strategy.

Research

Doing some research might help you refine your investment strategy and set realistic expectations. When it comes to gold, there are a few things to note.

  • The price of gold has followed an upward trajectory fairly consistently since 2001. Any short term volatility could be an opportunity to buy gold at a cheaper price.
  • Although it’s not always the case, gold tends to have an inverse relationship with the US dollar, so that a weaker dollar makes gold cheaper to purchase.
  • The supply of gold tends to be constrained while demand has tended to grow, so gold is likely to maintain its value over the long term. Gold is considered by many to be a ‘safe haven’ investment, partly because it can act as a hedge against inflation.

Gold Bullion

To buy gold bullion might be a good option when you decide to invest in gold. Investing in gold stocks or equities might lead to exposure to stronger bear and bull cycles. These cycles might have a lesser impact on gold bullion prices, as the price you pay when you buy gold bullion is almost solely determined by the gold price.

Owning your own bullion bars could be conveniently organised as there are reputable companies that provide included services such as authenticity and verification, storage, security, and insurance.

Make Your Purchase

Once you’re clear about your investment strategy, it’s time to make your purchase. Be sure to buy gold bullion only from a reputable provider. Your dealer should be happy to provide a certificate of authenticity, and a range of associated services such as security and storage could make the process simple and more convenient.

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Choosing Gold in the Midst of Europe’s Turmoils

June 30th, 2012 No comments

With some investors turning to the US dollar in the midst of Europe’s turmoils, it might be a good time to sell gold bullion. However, it could be an equally good time to buy gold bullion to take advantage of the potential for a rally in gold prices once European central banks start printing money again. Here is a review of some of the current trends in Europe that could affect gold prices in the near term and the longer term.

Europe’s Turmoils

  • Greece. Greece is the most recent country to attract international attention with respect to the European sovereign-debt crisis. The growing speculation that Greece may soon have to exit the Eurozone has contributed to a rise in the US dollar.
  • Lower gold prices. According to a recent report by Reuters, gold is currently hovering at around a 4 ½ month low, and has for the most part, moved in line with other commodities. With gold’s inverse relationship with the US dollar (which according to Bloomberg News has seen 12 consecutive days of gains against a basket of currencies as of May 16, 2012), it could make for a good opportunity for investors to buy gold or buy gold bullion and take advantages of these lower prices.
  • Gold still a safe haven? Given time however, a ‘Grexit’ and further Eurozone troubles could potentially lead to more quantitative easing, and in turn to higher inflation. Coupled with devaluing currencies, this could drive gold prices up as investors search for stable and safe haven commodities that might offer protection against inflation.

Why Buy Gold Now?

Although gold is negatively correlated with the US dollar, there’s potentially an opportunity for astute investors to buy gold now and possibly realise a gain as gold prices recover. This might be achieved by using a strategy to sell gold bullion once gold prices start bouncing back.

  • It has been widely reported that Goldman Sachs has recently predicted a record price for gold in the near future and expects to see it rise 26 per cent to $US 1,940 in the year to come.
  • A Reuters report has suggested that lower prices has led Asian consumers to buy gold, with surging demand from countries such as India, Thailand, and Indonesia.
  • The World Gold Council’s investment MD Marcus Grubb has predicted (in an interview with Mining Weekly Online) an upturn for gold once the Greece turmoil stabilises.

For the above reasons, it might be a good time to consider investing in gold or to buy gold for a hedge against longer term inflationary trends.

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How India is Buying Up Gold

June 25th, 2012 No comments

To buy gold and use gold is a common practice in many cultures. In countries such as China and India, gold holds a significant cultural value. According to the World Gold Council, India remained the top buyer of gold in 2011, ahead of China. We look at how this key Asian market is buying and using gold.

India’s insatiable demand for gold

  • With around 933 tonnes purchased in 2011, India is the leading buyer of gold in the world. China follows as a close second to India, purchasing 769.8 tonnes of gold in 2011.
  • To buy gold for relatives and friends often holds a cultural or religious significance in these two countries. In India, gold is associated with religious festivals such as Diwali.
  • To buy gold bullion or jewellery and wear it is sometime seen as a symbol of wealth or a secure way to hold wealth. China and India are expected to continue to account for more than 50 per cent of the world demand for gold in the coming years, particularly as living standards and spending power grows.
  • The World Gold Council has suggested that China will overtake India in 2012, with the PRC’s demand expected to surge by up to 30 per cent, and India’s demand to fall to 800 tonne to 900 tonnes. While global gold demand fell by 4.6 per cent in the first quarter of 2012, China’s rising middle class is expected to continue boosting world demand for gold.
  • According to the World Gold Council’s Gold Demand Trends Q1 2012 report, demand in India fell from 290.6 tonnes to 207.6 tonnes from a year ago, with investment demand falling 46 per cent and jewellery demand falling 19 per cent. The Council states that these falls and the expected slight decline in India for 2012 is partly attributable to the raising of taxes and import duties in India. Lower prices could mean that it’s a good time for investors to buy gold bullion.
  • However, to buy gold bullion and utilise it as a gift is a common practice in India. For this reason, it’s likely that investors and consumers will simply adjust to the higher taxes and duties, given some time.

Demand for gold expected to grow

According to comments by the World Gold Council’s Jason Toussaint in 2011 (as reported by Business Insider), only 40 per cent of Indian households buy gold. The remaining 60 per cent of Indian households might have a similar level of demand for gold that’s not yet realised. According to Toussaint, should current long term purchasing trends continue in India, Indian demand for gold could grow by as much as 400 per cent by 2025.

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Money is Being Printed in Europe. A Good Time to Buy Gold?

December 26th, 2011 No comments

Yes—it’s that bad in Europe. While European leaders continue to attend meetings and argue about how to solve the Euro crisis, here’s what’s actually happening in Greece, according to German magazine Spiegel.

Many Greek residents are having to use their savings to pay routine bills because the economy there is so terrible; they are also facing rising taxes and financial uncertainty. As a direct result, Greek banks are having to reduce their lending—thus worsening the recession in that country. Money in Greek savings accounts has decreased 30% in two years. And it’s a situation that could happen soon in Spain and Italy.

Financial and political leaders in Europe are seriously starting to consider printing money as one way to get out of the crisis. This would start once Italy, Spain, and other countries adopt austerity measures. While this will provide some much needed liquidity, it also poses the threat of inflation. And when there’s a serious threat of inflation, then it’s a good time to buy gold. Historically, gold has been one of the most effective ways to protect savings from inflation.

And there’s absolutely no guarantee that printing money will solve the crisis.

“When there’s concerted action by central banks, it’s definitely good,” Jens Sondergaard, senior European economist at Nomura International told Bloomberg. “But are liquidity injections a game changer when the heart of the problem is in European sovereign debt markets?”

A further problem on the horizon is the potential downgrading of credit ratings for 15 out of the 17 Eurozone countries.

“We are therefore also placing the ‘AAA’ long-term rating on the EU on CreditWatch negative,” announced credit rating agency Standard and Poor’s.

And it’s understandable. Italy is precariously close to defaulting on its debt of 1.9 trillion Euros. If even one of the current Eurozone countries decides to stop using the Euro, this decision could create a financial catastrophe by triggering sovereign debt defaults across Europe. The choice is stark. Several European countries will have to accept Greek-style austerity measures or the European Central Bank will have to print Euros.

There’s a reason the United States is extremely worried about the Eurozone crisis: many U.S. banks guaranteed European sovereign debt; if there’s a default, then the U.S. government would have to bail out their banks again. To achieve this, the U.S. Federal Reserve would likely have to roll the printing presses and print more money. Again—this significantly raises the threat of inflation.

It’s a mess. And the crisis in Europe is one of the main reasons to buy gold. Right now, it looks like there will be two major problems in Europe: inflation and continued economic uncertainty. Both make buying gold attractive as gold thrives during times of uncertainty and when there’s inflation.

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Gold Forecast. 2012. Tight Supply. Increased Demand. So it’s a Good Time to Buy Gold.

December 19th, 2011 No comments

We’ll take a look at the reasons there will be increased demand for gold in a minute but let’s start by taking a look at some big players in the market. In past blogs, we’ve mentioned that Middle Eastern and Asian countries are big buyers of gold.

  • Qatar has been buying more than a ton of gold every month for three years.
  • Russia recently bought more than 15 tons of gold from its mines.
  • The Reserve Bank of India bought 200 tons of gold the IMF sold.
  • Even tiny Mauritius bought 2 tons of gold in November.
  • And then China plans to buy gold: approximately 6,000 tons in five years.

It’s not easy to find this sheer quantity of gold. The supply of gold remains low. New mines are opening but it takes at least five years for a mine to produce at significant levels. With high demand, low supply, and a volatile global market, there’s a good reason that many commodities analysts are predicting significantly higher gold prices for 2012.

  • UBS has forecast $2,075 an ounce.
  • Barclays has forecast $2,000 an ounce ($35 an ounce for silver).
  • Morgan Stanley predicts a range between $1,819 an ounce and $2,085 an ounce.
  • HSBC predicts $2,025 an ounce.
  • TD Securities predicts $1,975 an ounce.

With the price of gold hovering around the $1,700 an ounce mark for several weeks, it may be a good time to buy gold.

Five Factors Pushing Demand for Gold

  1. The financial crisis in Europe over the Eurozone—which looks increasingly likely to lead to printing money…and inflation.
  2. Central banks are buying gold as they move away from the dollar.
  3. There’s strong demand for gold for jewellery in China, India, and the Middle East.
  4. Institutional investors may start buying gold—especially if global equity markets remain stagnant.
  5. The spectre of inflation—not just in Europe but all over the world.

With gold prices at approximately $200 an ounce below the high in September and many major financial institutions predicting prices over $2,000 an ounce in 2012, now could be a good time to buy gold.

In the short term, it will be extremely important for people who are considering buying gold to pay close attention to the news coming out of Europe.

“We expect gold prices to increase because of fear of a Eurozone implosion,” said Dennis Hynes, chief market strategist at R.W. Pressprich, told Bloomberg. “The only currency that’s stable in this type of situation is gold.”

Has Anything Changed in 2011?

November 23rd, 2011 No comments

At the beginning of 2011, the price of gold was $1,421 an ounce. In mid-November, the price was close to $1,787 per ounce and moving toward $1,800 an ounce. The price of gold has increased, despite a dip in September, because of the world economic situation; the factors influencing the price of gold have essentially remained the same—making it a great time to consider buying gold.

The factors:

  • Consistently strong demand for gold from India and China.
  • A weak dollar.
  • Continued uncertainty (and turmoil) in global equity markets.
  • No resolution to debt woes in the United States.
  • The Eurozone crisis.

If anything, the demand for gold from India and China has increased and the economic situations have worsened.

At the beginning of the year, certain ‘experts’ were optimistic about the economy. In front of the Senate Budget Committee, United States Federal Reserve Chairman, Ben Bernanke, said the U.S. economy was going to be “moderately stronger in 2011 than it was in 2010.” He went on to predict rampant growth between 3% and 4%. Obviously, a lot needs to happen in the month of December for Bernanke’s predictions to prove prescient.

Thankfully, the economists who help investors decide whether or not to buy gold have been more accurate in their assessment of the world economy—and the price of gold.

In December, CNBC mentioned Goldman Sachs:

“Goldman believes low U.S. interest rates will continue to underpin the rally in commodities like gold. The firm expects the precious metal futures to climb to $1,690 an ounce by the end of 2011 and continue to move higher.

The Bullion Research Desk of Commodity Online on December 22, 2010 said:

“Gold price to hover around $1500-$1600 range in 2011. Gold price will go up in 2011, driven by the fluctuations in US dollar and other currencies, dwindling productions, increasing mining problems and rising demand for jewellery and investment for the yellow metal. Gold price is definitely going to cross the $1500 mark per ounce in 2011 and it will remain in the range of $1500-$1600.”

And late last year, Bloomberg analyzed the gold price predictions of almost 30 investors, analysts, and traders. The ‘average’ prediction was $1,500 per ounce.

So…the ‘gold gurus’ were actually wrong—the price has exceeded their predictions. The factors influencing the price of gold have been more intense and are not going away as the headlines from the Eurozone crisis are proving.

So—is it a good time to buy gold? Remember…JP Morgan predicted a high of $2,500 per ounce by the end of 2011. Will they be correct? With the future of the Euro in serious doubt, gold could easily top $2,000 an ounce.

Whichever Way the Eurozone Goes – the Price of Gold Could Rise

November 16th, 2011 No comments

Have you heard the word contagion? It’s an ugly word the dictionary defines as:

“The communication of disease from one person to another by close contact.”

In European countries, the disease is debt—specifically default. Greece is having difficulty repaying its debts and Italy and Spain are extremely close to being in the same situation. The disease is spreading to all the European countries that use the Euro as their currency—which is all the major European countries excluding the United Kingdom.

And even through the currency in England, Scotland, Wales, and Northern Ireland is Pound Sterling, the U.K. is being affected by this crisis. The Prime Minister, David Cameron, has been part of the negotiations, the discussions, the summits, and all the meetings. In many cases, he’s been more vocal about the truth about the situation than others, saying recently there was now a “big question mark over the future of the Eurozone.”

Until now, the net result has been uncertainty. And if there’s one thing equity markets hate, it’s uncertainty. And when equity markets are not happy, the price of gold typically rises and it can be a good time to buy gold during uncertainty.

The chickens are coming home to roost for the leaders (and the countries) who got Europe into this mess. Angela Merkel, the German chancellor, has been saying that it’s a good time to ‘allow’ certain countries to leave the Eurozone. That’s a polite way of telling certain countries get out. In Greece and now, Italy, the Prime Minster and President, respectively, have resigned. Both countries now face a difficult choice: pursue austerity measures or get kicked out of the Euro.

With the possibility of two of the larger countries in the Eurozone leaving, the possibility exists that the Euro will collapse entirely. This could be catastrophic for large swathes of the European economy. With Europe moving closer and closer to the precipice, the price of gold has been inching upwards toward its record price of $1,923.70 an ounce on September 5 but dropped to $1,623.97 by early October. The price was back up to $1,787 per ounce on November 11. If the European crisis continues—and it looks likely to keep going—then the price of gold is likely to rise and thus now is an excellent time to buy gold.

Either the Euro will collapse completely, the ‘offending’ countries will be booted out, or the Eurozone will follow David Cameron’s suggestion and print money to get out of trouble. The latter will make the currency worth a lot less and inflation could emerge as a threat—inflation makes the price of gold increase.

About five weeks ago, a British politician said the Eurozone had six weeks to resolve the crisis. That ticking sound? It’s a bomb about to explode. And this explosion, however fierce, will likely affect the price of gold.

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When Is It The Best Time To Buy Gold?

February 24th, 2010 1 comment

When should you buy gold? Well, the short answer is ‘now’. When you understand how and why to buy gold, you can begin to buy it.

One of the beauties of gold is the fact that you can buy it whenever you need it. Unlike stocks and other investments, you can buy gold whenever you need it, timing is never an issue.

Ask yourself “Do I believe that I need to own gold?”, if you answer ‘yes’ then there is no reason to delay buying gold. Every day that you wait you are holding off on diversifying your portfolio. Economic crisis could come swiftly, wipe out your assets, and then you would be kicking yourself for not making the gold purchase you were thinking about.

Waiting to need to buy gold is poor strategy. There was a rush to buy gold during last year’s economic downturn, national mints could not keep up with public demand, and premiums went through the roof.

Gold can be almost impossible to buy when it is in high demand. During these times, you cannot just call a gold warehouse and place an order for gold. Even national mints cannot keep up with gold when their is a rush of demand like the ones in 2008 and early 2009.

In fact, Times Online posted an article in February discussed buying gold during a recession.

Even people who collect numismatic (high quality and rare coins) gold will have a hard time buying during these rushes to buy gold. Great demand can make people hold tight to their personal stores of gold. In some cases, the supply of gold can just simply disappear.

That’s why the best time to buy gold is now, global markets are still in an economic downturn, but the increased demand for gold has subsided. Gold will be easier to buy and at a lower premium than it has been recently.