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Outlook for gold still bullish PDF Print E-mail

The recent report on the prospects for gold by investment research house GFMS has been receiving a lot of coverage. If you haven't seen it, there is a summary here and another longer one here.

In essence, they believe the price of gold has still to rise, based on their analysis of various factors. These include the assumption that inflation will take off sooner or later (a good guess would be 2013), that China will remain keen on buying gold, and that the Indian market is to follow China, with a bit of a lag but with similar eventual huge consumer demand. 

Rising sovereign or national debt levels also help to drive investors into gold and raise the price, as people worry about the value of their currencies.

First Spouse Half ounce gold coins not selling well PDF Print E-mail

The 'first spouse' half ounce gold coins issued by the US Mint are not selling particularly well, and the news is that the mintages have been reduced from 40,000 to 15,000 starting with the latest issue, Abigail Fillmore. Obviously the Mint over-estimated the demand there would be for a new bullion coin like this.

These is some discussion here about the reasons the coins have not proved popular, while the market for other US bullion coins like gold eagles and gold buffaloes remains so strong.

One of the theories about their lack of popularity is that they are not attractive coins; another is that the women featured are mostly unknown historical personages who have no 'recognition' value; but the most convincing is that they are being sold at too high a price, and bullion investors can get their gold in other forms for a better price. 

The other way of looking at it, of course, is that since the mintages have been reduced, the rarity value of these particular coins will increase, if you can hold onto them for a couple of decades.

Gold Plated tungsten bars story laid to rest PDF Print E-mail

Last year's story about the 400-ounce 'gold bars' which were really clever fakes and which had been innocently bought by the Chinese central bank has finally received some more intelligent comment.

The bars were supposedly tungsten with a gold plating, and the Chinese had bought them in good faith, as the real thing. The $400,000 bars were virtually worthless, and the Chinese government was left gnashing its teeth...

But it was the story itself which was fake - read the analysis here. The writer believes the intent of the story was to undermine confidence in buying gold itself.

Well, I'll stick to small bullion coins thanks.



Pixels in a bank account PDF Print E-mail

Sorry about the gap in posting, I've been busy buying gold of all kinds (as well as some silver, but that's another story...)

Here's a tip - if you really, really want the cheapest possible gold, do a search for 'nugget's on the online auctions. While the larger ones command a premium, the smaller ones will often go for spot price or below.These are often being sold by the people who have found them.

Now, back to the present, and the rising price of gold, or 'new gold bull market' as some commentators are stating already.

In scanning the online media sources for gold stories, I often find stories like this one which give some insight into the historical background of gold. The government of Australia sold most of its gold holdings in 1997, believing that it no longer played any part in the global financial system. But this was not what the Chinese government believed, and they were secretly buying it up, just as they continue to do.

As is often the case, the comments on the stories are often more interesting and insightful than the stories themselves, and it was from one of the comments that I stole the title of this post. The Australian dollar has been devalued 98% in the last 40 years. Just think about that for a moment... The full comment runs "I'll trust the store of wealth par excellence for ten thousand years over the Australian currency or pixels in a bank account." That store of wealth is, of course, gold.

OK, off to do some gold panning in my favorite stretch of river.....


Olympic gold medals have how much gold in them? PDF Print E-mail

At every Olympic games, the same questions occur to some people: how much gold is there in an Olympic gold medal, is the medal solid gold, and how much is the medal worth?

While this all risks the reducing the skill, talent and determination of Olympic champions to a crude monetary value, the answers are:

  • There are 6 grams of pure gold in an Olympic gold medal
  • No, they are not pure gold, they are mainly silver with a gold coating
  • The gold in the medal is worth about  6/31.1 of the current spot price of one ounce of gold which at time of writing would be about $213.70

Not that much reward for all those years of training, but that's not why the athletes compete...

You will find that many people online are currently quoting a much smaller value for an Olympic gold medal. That's because they are looking at websites or information about past Olympic games which calcualte the value of the medals based on the current (then) price of gold.

They don't know, like collectors of gold do, what has happened to the price of gold recently.



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