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This blog discusses The Perth Mint's bullion coins and bars, providing information about our latest designs, mintages, sales volumes and sell outs. On a broader front, we share relevant research and opinions for anyone interested in gold and silver bullion investing.

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How Much Gold Is Enough?

Topics [ gold investing investment gold investment invest in bullion gold bars gold bullion bars buy gold bullion bars ]

PRECIOUS METAL SERIES – 6

If you’re persuaded by the argument that it’s important to diversify your investment portfolio with gold as an insurance against global gloom-and-doom scenarios, you need to consider how much gold is enough.

Roughly two years after the price of gold had declined from its all-time high in 2011, Professor of Economics at Harvard University, Greg Mankiw, concluded that it still made sense to hold a “small sliver” of gold in his portfolio. About 2 percent, he said.

In response, financial advisor, author and advisory board member Joshua M Brown argued that amount was nowhere near enough.  “It’s not ever going to have a large enough impact on a portfolio to matter,” he stated. But in advocating 25 – 50 percent of total assets, was he going over-the-top?

How Much Gold Is Enough?

The World Gold Council (albeit an industry body) is well respected for its research and analysis. Its suggestion falls into line with the many more moderate recommendations we’ve seen. Having crunched some relevant numbers, it states that “modest allocations to gold of 2 – 10 percent can protect and enhance the performance of an investment portfolio. A 5 – 6 percent allocation is optimal for investors with a well-balanced 60/40 portfolio.”

While warning that 20 percent is way too much, former hedge fund manager and now popular US financial commentator Jim Cramer also favours 10 percent as an upper limit. “I consider gold as an insurance policy and no worthwhile insurance policy should be 20 percent of the money you have invested," he said recently.

Ultimately, of course, it’s down to you, but take time to research the topic before deciding your personal ‘allocation to gold’.



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Rogers Sees Gold Going To US$2,000

Topics [ investment invest in bullion invest in gold ]

OPINIONS

Jim Rogers is a legendary investor who co-founded the spectacularly successful Quantum Fund in 1973 with George Soros. Rogers was in Australia recently and explained to ABC Lateline Business why he is so convinced about the future of farming, commodities and gold.



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Global Gold Demand Reflects Challenging Global Economic Climate – World Gold Council

Topics [ gold market investment sovereign debt ]

RESEARCH AND ANALYSIS

Global gold demand in Q3 2012 was 1,084.6 tonnes (t), down 11% from the record Q3 2011 figure of 1,223.5t.   This dip in demand is in comparison with exceptional demand in Q3 last year. Gold demand remains resilient. Q3 2012 was above the five year quarterly average of 984.7t, according to the World Gold Council's Gold Demand Trends Report.

Download Gold Demand Trends Third Quarter 2012



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Infographic: Gold As An Investment

Topics [ investment invest in gold gold ]

RESEARCH & ANALYSIS

How does gold behave like an investment and what are the fundamentals of investing in gold? What are the different ways investors can get exposure to gold in their portfolios? It’s taken a mighty infographic to deal with these and other question – make sure you click the image to see the series finale in its entirety:

Click to see the full infographic at Visual Capitalist.



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Predictions, Manipulation, Bubbles...

Topics [ investment gold prices silver prices ]

BLOG WATCH

Predictions

David Morgan: “… silver around the $40 level or higher and gold over the $1,900 level by the latter part of the year. I'm looking for over $2,000 gold, probably around the $2,300 level. Silver well over $40. I said $60 earlier in the year -- I'm not sure we'll get quite that high.”

Bank of America: “… cuts its gold forecast for this year by 5.4% to $1,750/oz from $1,850/oz … maintains its view that gold will target $2,000/oz this year.”

UBS Wealth Management: “… lowered his 12-month price forecast to $1,820 an ounce from $2,200 previously on lower than expected financial demand.”

Societe Generale On QE3

CNBC quoting a Soc Gen research note I guess was written pre-FOMC minutes’ no QE3: “We consider the drop in the gold price to be a buying opportunity as we expect the U.S. economy to surprise on the downside over coming months, which should result in the implementation of QE3…” Egg meet face.

Download today’s full Blog Watch (pdf 246kb) for more reviews, including:

No Manipulation In The Gold Market Today

Blogger Dan D goes in hard on those (specifically Jim Sinclair) claiming the FOMC minutes were a manipulation. He also goes after Sinclair for raising the “selling more gold than is mined in x days” meme - one of my pet hates too!

ETFs Dumb Down Investing

Not coincidentally, I follow with Grant Williams’ piece featured by Financial Sense that sees a ‘dumbing-down’ of the investment process thanks to a cornucopia of simple investment vehicles in the market.

Bubble Approaching?

It is with some trepidation I report on CNBC’s All-America Economic Survey where “37 percent of respondents said gold is the ‘best investment’, with real estate at 24 percent and stocks coming in third at 19 percent.”

India Import Drop

Big drops in Indian imports reported by Mineweb are creating some headwind for gold and silver.

Gold’s Productiveness

Addison Wiggin makes a great quip while doing a bit of Warren Buffett bashing.

Debt To GDP

Interesting figures from The Motley Fool on total debt to GDP ratios: US at 279% and Australia … 277%. Wait, I thought we were different..!

Game Changer

Neil Charnock has an interesting take on the implications if gold is accepted as a “high-quality liquid asset” under Basel3.


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