Gold performs better than property
Sun, 09 Sep 2012 6:23p.m.
By Susie Nordqvist
Kiwis’ love affair with property has been well documented. But with house prices in some parts of New Zealand still stagnant, is buying gold now the safer bet?
New Zealand Mint says business is booming, and for the first time it has allowed cameras in to show how investment coins are minted.
It is the beginning of a process to transform $1.5 million-worth of gold into 700 investment coins.
In this case, the gold has been purchased from a refinery in South Africa. It is heated to a molten state at New Zealand Mint before it's put into a mould and quenched in water to set. It's then rolled through a press where there's no room for complacency. Each gold belt must be exactly 38mm wide before it’s softened in preparation for stamping.
“The reason we mint a coin is to give it certification,” says Mint Master Karl Lindridge. “So those dyes we are using to stamp those coins out and give you the impression of the proud Kiwi on the front and the map of New Zealand on the back.
“Those dyes are protected and are secure in our vaults so no one else can actually copy those. And actually on the coin it has the four nines to say it's certified pure gold, so that's the certification. So when you're buying that it's recognised in New Zealand and throughout the world that it is a Kiwi coin.”
Every coin is valued at about $2300 and contains 1 ounce of 24-carat gold.
The whole process takes about five days, and in this case most of the coins have been sold to international investors and will be stored in a vault at New Zealand Mint.
“Many international investors view New Zealand as a safe-haven,” says New Zealand Mint chief executive Simon Harding. “It's politically stable; it has economic stability. So it's considered a safe bolt-hole. We have clients who very deliberately seek out New Zealand as a location to buy and store precious metal.”
That has caused New Zealand Mint's business to double in the past three years.
“Just last night we sold $2 million worth of gold to a company in Germany,” says Mr Harding.
New Zealand Mint says gold has appreciated faster than house prices in the past decade. The price of gold jumped 300 percent, whereas house prices grew by 200 percent.
But whether its golden run will continue is anyone's guess.
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1/12/2012 10:04:43 a.m.
Some say that greatest trick the Devil pulled was to convince us he doesn't exist, I say the his greatest trick was to allow the Banks to convince us that Gold is not money and has no value and that debt is money.
10/09/2012 5:04:11 p.m.
Gold is only holding its value as a back stop for currency and i am sorry to say isn't valued because its rare or its applications in technology the only things gold has in its favor is that because of its perceived historical value and rlationship to currency and therefore sought as a possible alternative. Also because gold must always be of more value than silver or copper that realy should be more expensive due to their applications in technology so the gold price is compleatly artificial. As pointed out by CHRIS,...it seems to be loosing pace... and not quite right as an investmet, its because it only has to keep parity with currency that as we all know is decreasing in value at an alarming rate.So buy gold its mighty pretty...but you can't eat it so does it have any real value at all?
10/09/2012 12:41:50 p.m.
Gold is priced at around $1700 what's with charging it out at $2300?
10/09/2012 10:33:04 a.m.
It would be interesting to see if these statistics included rental/lease + Capital appreciation when working out the ROI for Property and also factoring in storage costs for gold when calculating this comparison between Property and Gold.
Also don't forget that with the income from Property leverage is easier to obtain.
Don't get me wrong, I'm a big advocate for Gold & Silver and work in Real Estate, because I know governments will always be tempted use the hidden tax by inflating the currency to avoid spending cuts and tax increases, always playing into the hands of those who seek refuge in all hard assets.
10/09/2012 10:21:45 a.m.
Chinese Govt tell their citizens to buy GOLD & Silver Bullion.New Zealand Govt tell their citizens to get into KiwiSaver. LOL!National Party are criminals.
10/09/2012 9:56:24 a.m.
Susie, Can you please show us some figures and your analytical skills or is this just another overhyped rubbish
10/09/2012 9:33:48 a.m.
I would suggest most investors be very careful. Gold is a speculative investment and can go down as fast as it goes up. For example - An ounce of gold purchased for NZ$1,024.10 in 1980 should be worth NZ$5,062.75 in 2012 just keeping pace with inflation over that period. Since an ounce is only worth NZ1,735.80 today 10th Sept. poor old JOE(one of your previous correspondents) would have lost NZ$2,893 of his capital for each ounce of gold he purchased. On top of that it is dead money with no income return what-so-ever. Even if the gold price reaches NZ$2,500 per ounce, as predicted by Joe, a 1980's buyer is still NZ$2,500 behind the eight ball. If you are a multimillionaire with a large investment portfolio there is an argument to use gold as a hedge against catastrophe... but it's still got a mighty long way to catch up to it's 1980 value.
9/09/2012 8:09:01 p.m.
ive been buying as much bullion as i can get my hands on, these currencys are set for failure, the fundamentals are all there. this "golden run" will continue and i see gold at 2500 an ounce as very realistic, silver at easy 50, if not 100
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