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.

IN THE NEWS

Baker Steel Capital Managers have suggested that as an alternative to paying cash dividends to shareholders, gold miners should be working towards paying dividends in ounces of gold.

Bron Suchecki, Manager, Analysis and Strategy at The Perth Mint, thinks it is an interesting idea and, as he explained to Alan Korelin at the weekend, has some practical suggestions as to how it could be achieved for Depository account holders.

Listen to Bron’s ideas now on the Korelin Economics Report

WEBSITE INFORMATION

The long-awaited development of our gold and silver bullion sales site is underway with the extension of web sales in the following Asia Pacific countries:

• Singapore

• Malaysia

• Indonesia

• Philippines

• Thailand

• South Korea

• Brunei

• Hong Kong

• Papua New Guinea

• New Zealand

If you are an investor living in these nations, you can now use the convenience of the internet to purchase an extensive range of pure gold and silver coins and bars direct from the world-renowned Perth Mint, while also enjoying our hassle-free door-to-door delivery service.

Live Bullion Pricing

Launched in Australia in 2010 and extremely popular with Australian investors, the site is the world’s first to offer ‘live’ pricing on an extensive range of internationally recognised bullion products.

For those investing in precious metals for the first time, gold and silver prices are set on 24-hour international spot markets. Thanks to a breakthrough by the Mint, real-time data from these markets is used to continuously update the price of bullion coins and bars displayed for sale on the website.

The site offers many other benefits too, including:

1.    Volume breaks on coins
2.    High and low price alerts
3.    Price graphs
4.    Daily media coverage of precious metals
5.    A free Wealth Tracker widget to instantly calculate the value of your portfolio

Meet Ron Currie, Perth Mint Sales & Marketing Director, who discusses the many benefits of buying gold and silver bullion via the web from Australia’s specialist precious metal Mint in Perth.

Watch more Perth Mint coin and bar videos on YouTube

Register and Win!

To buy gold and silver bullion online from The Perth Mint, clients first need to register. The simple process takes a few minutes and under normal circumstances individuals are approved to buy within a couple of days.

To encourage Asia Pacific clients to register now, we’re offering them the chance to win a classic Kangaroo minted gold bar in tamper-proof packaging. Made from 1oz of 99.99% pure gold, it’s an extremely popular option with bullion investors worldwide.

Click here for full details

Fast Facts

 - The Perth Mint is operated by Gold Corporation, a statutory authority of the Government of Western Australia.

 - As the owner of Australia's only gold refinery, we refine almost all the gold mined in Australia, one of the largest producers in the world.

 - Our Australian Kangaroo, Kookaburra, Koala and Lunar bullion coins are issued as legal tender of Australia, their absolute assurance of weight and purity.

 - Small investment bars, which bear our official LBMA mark, can usually be traded internationally without the need for assay.

RESEARCH AND ANALYSIS

David Jollie from Mitsui Precious Metals has a research note out looking at QE3 and its likely effect on the prices of gold and silver. He analyses the first two rounds of quantitative easing and notes that silver outperformed gold both times but given “the economic picture is rather different from the periods of QE1 and QE2, … a considerable amount of uncertainty persists”.

Based on his historical analysis, David concludes that QE3 is likely to boost precious metals prices but does not feel that it will be as positive as the previous rounds because

  • each round of QE has shown diminishing returns, and

  • expectations of QE3 are already priced into the market.

Because David finds “little to no evidence that QE3 will generate any additional inflation” he sees “relatively little reason to buy gold today to hedge against this inflation: it may be more attractive to buy into silver or equities in the short term for most consumers and later to switch into gold [at the end of QE3] to cover for longer term inflation” when “experience says it should start to outperform silver once again”.

Noting that “some in the market believe that the monetary authorities are running out of ammunition”, David suggests that gold could benefit “if faith in governments being able to solve this situation dissipates” with resulting concerns that governments may resort to capital controls and other policies which could lead to either hyperinflation or deflation depending on the approach taken.

David’s final observation is that “the impact of QE on asset prices commences before the onset of QE itself”, which is why non-QE statements by the Federal Reserve are “greeted by a sell-off by the optimists who have pre-positioned themselves.”

QUICK GUIDE

Louis Golino (aka the ‘Coin Analyst’) wrote an article in CoinWeek yesterday called What’s the Best Way to Invest in Silver?

Discussing the merits of some of the world’s most popular silver bullion coins, including Australia’s Lunars, Kookaburras and Koalas, Golino noted that sales were generally lower than at this time last year.

“One would think buyers would be taking advantage of lower silver prices,” he observed.

Explaining why this may not be the case, Golino made a couple of telling points:

“…volatility of silver prices in the past year has been unusually high, and I think that has scared some people away. In addition, investors have a tendency to chase higher prices rather than buying on the dips. That is especially true of newer investors.”

If you are new to silver investing and put off by volatility, regular accumulation, or dollar cost averaging, has long been espoused as an effective strategy for ordinary investors.

It reminds me that after the significant correction experienced by both gold and silver at the end of 2011, the UK analysis and forecasting online publication Market Oracle recommended the following:

“Our favoured means of investing in gold and silver for most people, is for individuals to steadily buy a little each month in what would be called ‘averaging’ into a position.

Dollar cost averaging, or for UK investors, pound cost averaging, has been promoted as the best way of building a position for ages. We find the best advocacy of it by Benjamin Graham and David Dodd, the Godfathers of value investing, in their books ‘Security Analysis’ and ‘The Intelligent Investor’.

All this really means is that you invest a certain amount each month and buy gold and/or silver regardless of the current price.

When the gold price is high you buy less, when it is low you get more for your money. As a result your average cost per unit of gold bullion can be lower. The same applies for silver. Averaging into a position reduces your exposure to price volatility.

BULLION BARS AND COINS

We are now accepting orders for 10oz and 1 kilo silver bullion bars whenever they are shown as out-of-stock on the bullion website.

The move brings the web sales policy into line with The Perth Mint Shop and follows recent blog comments from customers expressing their willingness to wait for deliveries.

Physical availability of silver bullion bars is currently affected by the reorganisation and expansion of production facilities at The Perth Mint refinery. This is resulting in periodic stock-outs, which have been further exacerbated by soaring demand since silver’s recent price correction.

Anyone unable to order 10oz or 1 kilo silver bars via the website is invited to call our Bullionline on 1300 201 112. Your back order will be accepted at the price current at the time of your call.

However, you will have to wait for actual delivery and our Customer Service Officers will provide you with an estimated time only.  

The decision to accept back orders counters speculation that The Perth Mint was unwilling to sell silver when the priced dipped dramatically two-weeks ago. The bullion website crashed at that time because of unparalleled levels of traffic (something we have subsequently looked at from a technical point of view).

The argument is incorrect anyway, as there is no conceivable benefit to The Perth Mint to cease trading when the price of metal falls. As explained in a recent posting by my colleague David Kerbey, for every ounce of bullion our customers commit to buying, we immediately purchase the equivalent amount of precious metal on spot markets.

In other words, the bullion price we offer retail customers is simply a reflection of the price at which we are able to purchase it ourselves!

Blog Disclaimer, Comments Policy, Copyright Policy