Monthly Gold roundup with NZ Mint

Double Shot Interview: Mike O'Kane from NZ Mint in our monthly Gold roundup

7th Dec 10, 6:26pm by Bernard Hickey

Bernard Hickey talks with NZ Mint's Head of Bullion Mike O'Kane in our monthly roundup about global gold news.

Gold prices surged to a record US$1,429.40 an ounce overnight after US Federal Reserve Chairman Ben Bernanke said the Fed may increase the size of a its Quantitative Easing programme of bond buying or money printing.

O'Kane has just returned from the 5th Annual Gold and Precious Metals summit in Shanghai.

He talks about the debate at the conference about how the gold market might be opened up there.

The discussion centred about whether China should either join the London Bullion Market Association or create their own market.

The debate is happening as demand within China for gold surges in line with fears about inflation.

Some even argue each Chinese saver should hold two kilograms of gold, he says.

Chinese imports of gold have more than quadrupled this year.

Your views on gold and its future?

Precious metals

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Source: Kitco

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10 Comments

by muzza | 7th Dec 10, 8:27pm 1291706850

Just another fad.

by Malarkey | 7th Dec 10, 8:42pm 1291707773

Yep. Another fad just like the recent property bubble.

by scarfie | 7th Dec 10, 9:51pm 1291711915

What I wonder is that gold seems to have mirrored the performance of other commodities, so if China's economic growth slows because the west stops buying their manufactured goods, then will the price of gold reflect the slide of commodity prices as demand drops off?

Or will Gold remain a hedge against the uncertainly caused by tumultuous condition of the world economy, a protection against hyperinflation and the collapse of currencies.

We didn't see hyper inflation in the last major depression, but we has a fixed price of gold then.

by Matt S | 8th Dec 10, 9:20am 1291753210

My friends and I are buying while the prices remain relatively low, in fact I picked up another 20 rounds of silver this week from the mint to add to my retirement fund. Silver especially has the potential to shoot up much higher from this level after years of price suppression.

by scarfie | 8th Dec 10, 9:22am 1291753379

http://www.silverinstitute.org/supply_demand.php

I agree that the Gold/Silver ratio is historically low but check the link for where the demand is coming from. It certainly isn't industrial use.

When it is only investment that is driving the price then it becomes speculative.

According to Kitco both Gold and Silver have eased back overnight.

by Matt S | 8th Dec 10, 12:06pm 1291763204

Would be interesting to see what the 2010 figures look like, but it certainly confirms my belief that P.M's are being treated as (or starting to behave like) a shadow reserve currency. Also I was reading an article this morning by James Turk that discusses the significance of both silver and gold being in backwardation, and is being interpreted as a sign of physical shortages in both metals.

Link here

by Rob of the North | 8th Dec 10, 9:14am 1291752875

Reuters

Newcrest Mining Ltd expects to boost gold output to 3.75 million ounces in fiscal year 2014 from 2.74 million ounces in 2010, an executive said.

Geoff Day, chief operating officer offshore operations, made the forecast at a conference in Sydney.

Newcrest acquired rival Lihir Gold Ltd this year, which operated mainly from Lihir Island in Papua New Guinea.

Shares in Newcrest lifted on the news, closing 0.99 per cent higher at $41.50, in line with a 0.81 per cent rise in the benchmark index.

Newcrest are the 4th largest gold and copper mining co. in the world..where's Wally?

by chrissy | 8th Dec 10, 9:26am 1291753563

Which age group would be buying precious metals? Is it the younger generations that has seen the trauma suffered by older generations in the collapse of fixed income and equities? Is it the turfing out of the old paradigm?

I have precious metals - I am generation x.

I can see the metals - and understand it. It isn't overpriced like RE at this point.

I also have nz currency - which seems to hold it's value steady relative to the US$ which is sinking rapidly - double digit percentages in the last year. Translation: nz dollar is unstable.

by Andy Rodgers | 8th Dec 10, 10:55am 1291758924

The only reason that precious metal prices are rising is the lack of faith in all fiat currencies. While clowns such as Bernanke, King, Bollard etc. are in charge of monetary policy worldwide investing in the PM's will be a winner.

Just think how much wealthier NZ'ers would be if instead of sinking their savings into Bridgecorp, Strategic, Hanover, Credit Sails, ING etc in the mid 2000's they had bought precious metals. Instead of virtually losing all their savings they would have doubled them.

by SK | 8th Dec 10, 11:47am 1291762027

These spiking gold prices could be prophesising hyper inflation.