Gold looks especially good right now

Gold looks especially good right now

Sub-continent suitors, a strong New Zealand dollar and the shopping habits of Americans are all pointers to right now being a great time to stock up on gold.

Auckland-based New Zealand Mint says all the signs are in place that gold is undervalued in relation to medium term prices.

New Zealand Mint bullion dealer Mike O’Kane says demand is currently weak and coupled with a number of economic factors it suggests it’s time for investors to fortify their bullion portfolios.

“It’s generally recognised the Indian wedding season puts upward pressure on the price of gold. Indian brides traditionally drape themselves in gold and it’s not unusual for wealthy families to spend a couple of million dollars on gold for a wedding.

“Gold’s used because women are not permitted to own property in the Hindu religion,” O’Kane says.

“India is the world’s largest importer of gold and a JP Morgan report that shows the world price of gold has leaped by 10 per cent every year during the September-October wedding season since 2002.”

O’Kane says other factors pointing to higher demand include a feeling in the market that the New Zealand dollar is too high and that there are long term inflationary pressures in the United States.

“Retail sales in the States are more buoyant than expected and the more optimistic the economy the higher the probability of inflation. And in inflationary times, investors target gold as a solid hedge.

“Plus, with gold traded in US dollars, any drop in the Kiwi against the Greenback will put price pressure on the metal. With the Fitch report recommending a negative outlook, we would expect to see a drop in the NZD/USD cross soon. So gold’s worth more than just a look right now for any balanced investment portfolio,” O’Kane says.

Gold has traded in a range between NZD$1400 and NZD$1600 in the past four months O’Kane says.

ENDS

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