Gold? So what!!

Feb 25th 2004  

In today's world there is a flight of money from consumption type nations, the USA, into productive type nations....... NZ, Aust, SA, Can.

Written Jan 2004 Alan Lunt

What is gold? Well it's shiny and yellow and worn on the finger by the married. I talk to people about gold and they just look at me and change the subject to property. Stating how well housing has done in the recent past. I get an even more vacant stare if I mention silver.

Why would people in this country, New Zealand, want to buy gold as an investment, cash has been better over the last 3 years. Property has been the place to be at. In US dollar terms cash has advanced 64% and property in the demand areas over 300%, poor old gold has not held it's own in NZ dollar terms. Even as I know to the bottom of my boots that gold is the safest investment of all ( it will never be worth nothing ), I just do not see it in the sights of the local investor. The magazines and newspapers have screeds of editorials about houses and housing, but it is only mentioned in the 2 centimeter by 4 centimeter bloke at the bottom of the financial pages in a few of the major daily newspapers, and then possibly only once a week in the business edition.

To compound matters further there is a lack of outlets that sell gold in the 99.999% fine state. When I bought mine I did a goggle search, always appending the nz suffix. I came up with one entry and that was of a jewellery chain. The margin above market was 20%. I have since found a better source, but that took over 6 months of searching. This last outlet is 50% cheaper for 99.999% fine silver than the jewellery store. I was determined to buy but could have been put off by the difficulties I faced.

One thing I did note however was that 99.999% fine bullion attracted no Goods and Services Tax, whereas gold below 24 carats did, so coins did not enter into the equation at all. I wonder if that means that gold in its pure form is money. I also noted that I did not have to declare my purchase to the Inland Revenue Department. So maybe it is the ultimate investment here.

Is gold in the investment thoughts here? Nope, it is the ancient relic, to be worn on the finger. Currency issues have precluded it from thought processes and to own it you must be "nuts".

Alan Lunt

allies1111@tacticalinvestor.com