About Perth Mint Bullion Blog

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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Gold price to stay stable says Chief Economist

Topics [ gold prices ]

Investors prepared to hold gold over the long term will be encouraged by the latest findings from the Office of the Chief Economist at Australia's Department of Industry, Innovation and Science.

According to its latest forecast, the price of gold will be driven by the metal’s safe haven status to an average of USD 1,350 an ounce in 2019.

Following a predicted drop in the price of gold in 2020, declining world mine supply will help it regain momentum in 2021-23.

Publishing details of its analysis in the March 2018 edition of Resources and Energy Quarterly, the Office says it expects Australian dollar gold prices to remain steady over the outlook period as higher world prices offset unfavourable moves in the exchange rate.

According to experts, gold can play a valuable role in any investment portfolio. An asset that’s been shown to withstand depreciation over time, gold has traditionally displayed a negative correlation to equities and may play a role in mitigating overall losses in volatile markets.



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2017 LBMA Precious Metals Forecast Survey reveal analysts are bullish

Topics [ gold prices silver prices ]

Thirty analysts representing twenty six different companies participated in the London Bullion Market’s latest annual Precious Metal Forecast competition.

Contributors were bullish across the board for the four key investment metals, with analysts forecasting that the average gold price in 2017 will be 5.3% higher than the average price in the first half of January 2017.

They were slightly more bullish about the prospects for silver prices, with an increase of 7.1%, but less bullish about PGM prices. For platinum, they forecast an increase of 4.9%, but expected a more modest outlook for palladium, with a forecast increase of just 2.4%.

The full 2017 LBMA Precious Metals Forecast Survey, including each analysts’ supporting commentary, can be downloaded here: www.lbma.org.uk/assets/Forecast_2017_Interactive.pdf



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Gold price spikes high in Aussie dollars

Topics [ gold prices ]

GOLD PRICE

When the nightly newscaster reports the price of gold per troy oz, more often than not it is quoted in US dollars. That’s because gold is traded on commodities markets in US dollars. Of more interest to investors in Australia, however, is the price of gold in our local currency.

Gold looks more affordable in Australia when the Aussie rises against the US dollar. Conversely, it becomes more expensive when the Aussie weakens against US dollar. So whether you’re buying or selling gold, it makes sense to keep an eye on this important relationship.

 

The red line in this graph shows the price of gold* in US dollars for the past six months. The blue line shows the gold price in Australian dollar terms over the same period. The latter reflects not only the inherent value of gold, but also the relative strength of the Aussie against the Greenback.

Amid Brexit and other global concerns, gold priced in Australian dollars is currently near record highs at around AU$1,800.

*Perth Mint Spot Price



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Bullion pricing – how it works

Topics [ gold prices buy silver bullion online buy gold bullion online ]

 

So, you’ve made the decision that it’s time to add gold and/or silver bullion to your investment portfolio. Now it’s time to understand how the price of your coins and bars is calculated.

Spot Price & Futures Price

There are two benchmarks for precious metals – spot prices and futures prices. These prices are determined by ‘over-the-counter’ markets and ‘futures exchanges’. We’ve explained more about both of these here

Even though they tend to be reported on TV and radio news, spot and futures prices are unavailable to retail buyers of gold and silver bullion coins and bars.

Retail price

When setting the price of bullion for retail investors, The Perth Mint takes into account these international benchmarks. Our calculations include a ‘premium’ over the metal price to cover the cost of fabrication of raw gold into coins and bars. To ensure we have a viable business, the Mint’s premium also includes a profit margin.

 

There are a couple of general rules worth knowing about premiums.

They are lower on bullion cast bars because the fabrication process is fairly straightforward. Bullion coins, which offer a number of important benefits including legal tender status, greater divisibility, rarity and detailed designs, are more complex to fabricate. As a result, the premium paid is slightly higher.

Notice, however, that premiums per ounce are usually lower on larger coins. You’ll also be able to discount the premium per ounce by taking advantage of volume breaks.

Live price

Taking their lead from international benchmarks, retail prices of gold and silver bullion fluctuate during the course of the day. To reflect this, our advertised prices are constantly updated.   

When placing an order for bullion on the Mint’s bullion website, you have one minute to lock-in the ‘live’ price of gold or silver before it is automatically revised – either up, down or no change.

When ordering by telephone, a customer service officer will confirm the price before completing a purchase on your behalf.     

Local currency

The price of gold and silver bullion is also directly affected by the relationship between the U.S. and Australian dollars.

This is because precious metals are U.S. dollar denominated commodities. But for the convenience of local customers, The Perth Mint prices its bullion in Australian dollars.

So if the Australian dollar strengthens relative to the U.S. dollar, the local price of bullion will fall. Conversely, if the value of the Australian dollar weakens relative to the U.S. dollar, the local price of bullion will rise.

The Australian dollar last hit parity with the U.S. dollar in 2013, negating this effect. More recently, the Aussie’s value has declined somewhat, explaining why the price of gold in Australian dollars has remained strong.



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Gold Market Reports Come Thick And Fast

Topics [ gold market gold prices ]

RESEARCH AND ANALYSIS

Gold market reports abound with no less than three hitting the street this week from key precious metals analysts.

Author: Metals Focus
Title: Gold Focus 2016
The upbeat assessment from Market Focus says gold’s more than $200 rise during the first two months of 2016 probably marks the end of the metal’s bear-cycle. Predicting investor sentiment will continue to solidify, a peak of $1,350 per ounce is on the cards in Q4, it says.
More at Metals Focus

Author: GFMS/Thompson Reuters
Title: GFMS Gold Survey 2016
Less bullish, GFMS analysts at Thompson Reuters say gold’s blistering start to 2016 will "prove to be short-lived, and once current market turbulence starts to ease, we are likely to see the price retreat." But gold will once again find support on improving market fundamentals, it forecasts.
Download at Thompson Reuters

Author: The World Gold Council
Title: Gold in a world of negative interest rates
According to the WGC, the current rise in the price of gold is due in part to NIRP – that’s Negative Interest Rate Policies.  This report discusses the important role that gold plays in managing risk amid low interest rates in parts of the world such as Europe and Japan.
Download at World Gold Council



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LBMA 2016 Forecasters Predict Precious Metal Price Increases

Topics [ gold prices platinum prices buy silver bullion online silver prices buy gold bullion online ]

RESEARCH AND ANALYSIS

At the beginning of each year the London Bullion Market Association (LBMA) polls a range of respected precious metals analysts in the large banks and independent consultancies for their forecasts for metal prices for the coming year. This year contributors are “predicting price increases across the board for all four metals”.

Their forecasts for the average price during 2016 are:

 • Gold – $1,103, ranging from $978 to $1,231

 • Silver – $14.74, ranging from $12.63 to $16.78

 • Platinum – $911, ranging from $748 to $1,076

 • Palladium – $568, ranging from $413 to $674

LBMA forecasts have been quite accurate historically.

This year the range of forecasts for gold is quite tight, indicating more consensus or confidence amongst the analysts about gold. The most pessimistic analyst is René Hochreiter who forecasts a low for gold during the year of $850 while Martin Murenbeeld sees a high of $1,375.

The LBMA analysts are less accurate in the case of silver. This year their range is wider but overall see a downtrend. Bernard Dahdah sees a low for silver of $11.00 with Philip Newman seeing silver getting as high as $19.50 during 2016.

Click here to download the LMBA Forecast 2016.



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