Chart usGOLD   Chart usSILVER  
 
Food for thought
Diplomas are made for people without talent
Pierre Desproges  
Search for :
LATEST NEWS  :
MINING STOCKS  :
Subscribe
Write Us
Add to Google
Search on Ebay :
PRECIOUS METALS (US $)
Gold 1242.761.76
Silver 17.190.05
Platinum 1260.455.35
Palladium 769.203.90
WORLD MARKETS
DOWJONES 16461-154
NASDAQ 4383-37
NIKKEI 15095-101
ASX 537361
CAC 40 410524
DAX 894053
HUI 185-6
XAU 76-3
CURRENCIES (€)
AUS $ 1.4416
CAN $ 1.4216
US $ 1.2636
GBP (£) 0.7872
Sw Fr 1.2063
YEN 135.5450
CURRENCIES ($)
AUS $ 1.1410
CAN $ 1.1249
Euro 0.7914
GBP (£) 0.6230
Sw Fr 0.9545
YEN 107.2510
RATIOS & INDEXES
Gold / Silver72.30
Gold / Oil15.23
Dowjones / Gold13.25
COMMODITIES
Copper 3.03-0.01
WTI Oil 81.58-0.38
Nat. Gas 3.69-0.02
Market Indices
Metal Prices
RSS
Precious Metals
Graph Generator
Statistics by Country
Statistics by Metals
Advertise on 24hGold
Projects on Google Earth
Double Boost For Aussie Gold Ahead?
Published : May 08th, 2012
465 words - Reading time : 1 - 1 minutes
( 0 vote, 0/5 ) Print article
 
    Comments    
Tweet
Keywords :   Australian Dollar | Fail | Gold | Gold Market | India | Reuters | Wind |

 

 

 

 

BLOG WATCH

Dr. Alex Cowie at Money Morning has a piece on gold noting that while gold has been range bound recently, during its 12 year bull-run, gold has often made its next move up after it has ‘done some work’ in a particular price range for a while.”

What is more interesting for Australian investors is the discussion of the impact of the AUD/USD foreign exchange (FX) rate on the Australian gold price. In our Depository business we have often seen Australian investors fail to consider the impact of our FX rate on the local gold price, which is (assuming USD gold stable):

• FX rate rises, Australian gold price down

• FX rate falls, Australian gold price up

This sometimes results in clients calling up to sell after a rise in the USD gold price and expecting a profit, but then find we are quoting an AUD gold price lower than their purchase price – all because the effect of the FX rate rising since they bought being greater than the increase in the USD gold price.

A good example of the effect of FX rates was in 2008. Consider the four month period illustrated in the table below.

 


 

Whilst US based investors experienced a loss, gold was positive for Australian investors. Dr. Cowie gives a long term example of this effect, noting that “the Aussie dollar gold price has gone up an average of just 11.0% per year for the last ten yearscompared to the US dollar gold price, which has gone up an average of 17.2% per year.”

However, he sees a good opportunity coming up, with the Aussie dollar havingnow dropped from $1.08 to $1.02 in just a few months. The Reserve Bank of Australia’s 50 basis point interest rate cut last week has really taken the wind out of the Aussie. Judging by the down-leg in previous interest rate cycles – not to mention the state of the Australian economy – more cuts are coming. Which should mean the Aussie may have further to fall yet.”

If that fall in the Australian FX rate coincides with an increasing USD gold price (as some analysts expect), then Australian gold investors are looking at a very good opportunity to buy gold.”

So as an Australian investor you have to consider not just what the USD gold price will do, but also what the Australian dollar will do relative to the US dollar.

Download today’s full Blog Watch (pdf 185kb) for more reviews, including:

PRO MARKET FEEDBACK

Some feedback from professionals in the gold market as reported by Reuters.

SILLY YELLOW TRINKETS

John Mauldin on gold as “insurance”.

INDIAN GOLD TAX SCRAPPED

Wall Street Journal reports that India has removed the excise tax on sales of all gold jewelry.”

 

 

Data and Statistics for these countries : India | All
Gold and Silver Prices for these countries : India | All
Tweet
Rate :Average note :0 (0 vote)View Top rated
Previous article by
Bron Suchecki
All articles by
Bron Suchecki
Next article by
Bron Suchecki
Receive by mail the latest articles by this author  
Latest comment posted for this article
Be the first to comment
Add your comment
TOP ARTICLES
Editor's picks
RSS feed24hGold Mobile
Gold Data CenterGold & Silver Converter
Gold coins on eBaySilver coins on eBay
Technical AnalysisFundamental Analysis

Bron Suchecki

Bron Suchecki is Manager Analysis and Strategy at The Perth Mint.
Bron Suchecki ArchiveWebsite
Most recent articles by Bron Suchecki
10/22/2014
10/20/2014
10/17/2014
9/26/2014
9/18/2014
All Articles
Comment this article
You must be logged in to comment an article8000 characters max.
 
Sign in
User : Password : Login
Sign In Forgot password?
 
Receive 24hGold's Daily Market Briefing in your inbox. Go here to subscribe or unsubscribe.
Disclaimer