FREQUENTLY ASKED QUESTIONS

For new gold or silver bar investors, it’s important to check out your chosen brand before committing to buy.

Here’re two trusted resources that will help confirm that you’re purchasing a reputable product.

London Bullion Market Exchange

The London Bullion Market Exchange (LBMA) is the international trade association representing the wholesale market for gold and silver. Any bar made by an accredited member of the LBMA is accepted by all bullion traders and dealers, so you won’t have a problem re-selling it back.

The LBMA website maintains a list of accredited refiners for both gold and silver bars.

Gold Bars Worldwide

This is another excellent source of information for anyone wanting to know more about gold bars (and coins). As well as listing recognised brands, it includes details of every conceivable type of gold bar and great advisories on buying and selling.

If it’s not listed on Gold Bars Worldwide, think seriously before you commit to purchasing it.

The best way to avoid potential pitfalls is by choosing your supplier carefully. As well as the LBMA, The Perth Mint enjoys accreditation as a refiner, weight master and assayer with the New York Commodity Exchange (COMEX), the Dubai Multi Commodities Centre (DMCC), and the Tokyo Commodity Exchange (TOCOM).

FREQUENTLY ASKED QUESTIONS

Having an official face value is part of what gives coined bullion its legal tender status.

Although face value represents the price the Reserve Bank of Australia would redeem an Australia bullion coin for, in reality, it’s nothing more than a nominal figure advised by Federal Treasury.

Take our 1oz Australian Kangaroo gold bullion coin, for example, which has a face value of $100. That’s a ridiculously low figure compared to the value of its actual gold content, which is tied to the ‘spot’ market.

The face value of a bullion coin does not reflect the value of its precious metal content.

So while it is important for investors to ensure their bullion coins do have an official face value, they need take little notice of it thereafter.

By selling your bullion coins to The Perth Mint or a reputable coin dealer, you’ll receive much more - a fair price close to the metal’s prevailing spot rate.

And if it’s highly sought-after, the coin could have some numismatic value, meaning you may be able to find someone willing to pay a premium!

IN THE NEWS

Do you buy precious metal when the market is rising? Or do you see opportunity when prices correct?

According to Bron Suchecki, Perth Mint Manager, Analysis and Strategy, Asian buyers of gold and silver are more likely to fall into the second category.

Asked by Tekoa Da Silva on Bull Market Thinking what interesting things he's currently seeing from China and India in terms of demand for coins and bars, this is what Bron said:

“They will desert the market if prices move up, [but] will come back in when the prices correct…When they feel the gold price has formed a new base…they’ll see that as the new bottom, they’ll buy that bottom, and they’ll demand returns. [That's when] we have bullion banks calling us up desperate to get kilo bars.”

It’s a totally different approach to one often witnessed at The Perth Mint, as Bron explained:

“That contrasts a lot with what we see as a retail client mentality - which is when the price is going up they buy, because they like to go with the trend and need to feel confident that the trend is in their favour, and when the price starts to fall—they sell.

“[So] the Indian and Asian buyers are more canny, and really operate in reverse.”

You can listen to Bron’s full interview here.

IN THE NEWS

Why is the gold price weaker? It’s mostly big money speculators, hedge funds and people in it to make a quick buck, according to Bron Suchecki, The Perth Mint’s Manager, Analysis and Strategy. They’re playing the trends and if they think the trends are against them, they all start piling out, he says.

Making his latest media appearance on the Financial Survival Network, Bron reports that while Perth Mint Depository had not seen much buying recently, there had been no radical selling from existing customers either, which is a positive sign for everyone with a strong commitment to gold.

And on a personal note, Bron says he is unfazed by the dip in the gold price, but suggests if you are feeling stressed about volatility, then maybe you have too much allocation to gold in your investment portfolio?

Listen in full to Bron in discussion with Kerry Lutz now.

RESEARCH AND ANALYSIS

The World Gold Council's latest study of the gold market reports the value of gold demand in 2012 reached an all-time high, up 2% to $236.4 billion.

On a tonnage basis, it found gold demand was down 4% on 2011 to 4,405 tonnes – the first dip since 2009, but still the second highest level of gold demand ever recorded.

The average price of gold during 2012 was $1,669.0 per oz, up 6% from $1,571.5 per oz in 2011, it said.

Global gold demand in Q4 2012 was 1,195.9 tonnes(t), up 4% on the same quarter in 2011. In value terms, demand reached $66.2 billion.

Get The Report

Download The World Gold Council's Gold Demand Trends Q4 & Full Year 2012.

EDUCATION

In a look at the impact of silver on civilization since it was first extracted some 5,000 years ago, this stylishly-made new video from SilverInstituteTV examines the history, properties and uses of one of nature’s most precious resources.