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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 do you know about gold investing?

Topics [ invest in bullion invest in gold invest in silver ]

It’s easy to fall in love with gold. After all, the rich and famous have obsessed over it for millennia.

During the past two decades, gold ownership has become much more widespread. No longer a sole preserve of the elite, every day and mum and dad investors have also taken a shine to the glittering yellow metal.

Accessibility to gold through bullion bars and legal tender coins, certificates and exchange traded products makes buying and storing gold simple. Driving folk to take advantage is this new found convenience is the growing appreciation of gold’s beneficial role within a diversified investment portfolio.

Before jumping in, it’s definitely a good idea to acquire a firm understanding of the case for gold. Here’s a short quiz designed to test your existing knowledge - answer these questions correctly and you’re well on the way to being an ace gold investor!

1. How many Jumbo jets would all the gold mined throughout history fit into?
a) 10
b) 20
c) 30

2. Gold and other precious metals are traditionally weighed in ounces known as:
a) Avoirdupois
b) Tower 
c) Troy

3. Between 2000 and 2012, the price of gold went up 800 per cent. What was the approximate price of an ounce of gold at the start of the millennium?
a) USD 440
b) USD 550
c) USD 660

4. When the exchange rate between the United States and Australian dollars goes up, Australian investors are likely to:
a) Pay more for gold
b) Pay less for gold 
c) Pay the same for gold

5. What purity constitutes investment grade gold for coins and bars, making them exempt from Australian GST? 
a) 92.5%
b) 99.5%
c) 99.99%

6. The gold to silver ratio (ounces of silver it takes to buy an ounce of gold) averaged 47 throughout the 20th century. What is its current level?
a) 55
b) 65
c) 75

7. When the gold to silver ratio drops below 50, practised investors are more likely to:
a) Buy gold and sell silver 
b) Sell gold and buy silver
c) Divest their gold and silver holding

8. Professor Roy Jastram’s landmark statistical examination of how gold’s purchasing power has remained consistent over the centuries is entitled:
a) A Pot of Gold
b) The Golden Constant
c) The Gold Standard

9. According to various portfolio theories, investors could benefit from holding anything between 1% and 15% of their assets in gold bullion. However, as part of his famed Permanent Portfolio strategy, investment analyst Harry Browne suggested the allocation to gold should be high as:
a) 20%
b) 25%
c) 30%

10. Which of these statements is false?
a) There is no counterparty risk associated with owning physical gold.
b) The market for gold bullion is highly liquid, making it easy to sell.
c) Central Banks around the world hold less and less gold.


Answers:
1. a) 187,200 tonnes, the latest estimate of gold ever mined by mankind, has a cubic capacity of approx. 9,700m3. According to this source, a 747 -400 Jumbo jet has a combined passenger and cargo volume of 1,035m3. The gold would therefore fit comfortably within 10 of  these aeroplanes.
2. c) One troy ounce equals 31.1034768 grams or about 1.0971 avoirdupois ounces.
3. a)  USD 440.
4. b) If the exchange rate goes up, the AUD price of gold goes down.
5. b) 99.5% pure gold in an investment form is GST-free in Australia.
6. c) 75.
7. a) The gold:silver trading strategy suggests it’s time to buy gold and sell silver.
8. b) The Golden Constant 
9. b) 25%
10. c)  Central Bank’s around the world hold less and less gold.



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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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Understanding What's Happening In The Gold Market

Topics [ Silver Price gold prices invest in bullion ]

OPINION


 

Don't miss this discussion about price action in precious metals since April and what the future might hold for the price of gold and silver. Ben Giddins from Gold Stackers Australia sets the scene for insightful comment from Bron Suchecki, Manager, Analysis & Strategy at The Perth Mint, and Greg Canavan, Editor of The Daily Reckoning and Sound Money, Sound Investments.



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US Survey Backs Perth Mint Findings On Customer Attitudes To Gold

Topics [ invest in bullion invest in gold invest in silver ]

RESEARCH AND ANALYSIS

Even though world stock markets are surging, a survey in the United States suggests many retail investors will continue to invest in gold.

The CNBC All American Economic Survey, which last month questioned 800 people, found 35% favoured gold as their best investment choice, down just two points on last year.

Beating real estate, stocks, savings accounts and bonds, gold continues to “bedazzled” Americans, CNBC said.

Perth Mint Survey Results

The findings reflect the feelings of Perth Mint bullion buyers, as our own Website Customer Survey recently revealed.

More than 850 clients responded to the online questionnaire, issued in February.

Over 53% answered ‘very good’ while 36% answered ‘good’ when asked about their outlook for the future of precious metals as an investment.

In another indication that many buyers continue to see bullion as an important investment, 60.9% said they were ‘very likely’ and 25.3% said they were ‘somewhat likely’ to continue doing business with us via www.perthmintbullion.com.

Traditionally seen as a safe haven in times of uncertainty, gold is often quoted as an ideal foundation asset accounting for 5 to15% of a healthy investment portfolio.



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Use Wealth Tracker To Get An Instant Valuation Of Your Bullion

Topics [ gold coins silver bars invest in bullion gold bars silver coins ]

BULLION BARS AND COINS

This video shows how easy it is to download and use the free gold and silver bullion Wealth Tracker from The Perth Mint. Once the handy desktop widget is installed on your computer, simply input details of your entire precious metal portfolio, including coins and bars from other internationally recognised mints, for an instant valuation at current Perth Mint buy back prices.

 


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