Rollercoaster ride for the gold price

Rollercoaster ride for the gold price

NZ Mint Head Bullion Trader Mike O’Kane comments

The gold price looked set to break record highs this week as investors worried about the health of Europe’s banks and levels of potentially risky government debt.

The uncertainty saw investors avoid stocks and bonds and look at the Yen, Treasuries and gold as a safe haven, as worries mounted another financial meltdown was imminent.

But while major markets are paying top dollar for gold, it remains relatively well-priced in New Zealand dollars. The NZ Mint is seeing an upsurge in volume locally with a significant amount of trading being done in New Zealand dollars due to its strength against the USD.

A Price Waterhouse Cooper report ‘New Zealand Banking Perspectives’ revealed the health of New Zealand banks to be in relatively good shape coming out of recession but with European banks still on shaky ground the increased demand for gold looks set to continue.

The US Markets reacted favourably with a return to risk after lower jobless claims and smaller than expected trade balance. This led to profit taking, bringing the gold price back from its highs of the week. The medium term outlook for gold still remains high and there are more highs expected in the coming months, off the back of physical demand.

Issued for NZ Mint by Pead PR

ENDS

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