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$1000 – What a Rush

March 14, 2008 at 18:20 by Mario

GOLD — the world’s most popular treasure — is sparkling brighter than ever.
The price of the precious metal has climbed above $US1000 an ounce for the first time and many experts predict it will keep rising.
But that does not mean it’s time to sell all your jewellery for a handsome profit or start buying gold bars to store under your bed.
For starters, a typical 1kg gold ingot will cost you more than $37,000, and if burglars found one in your house they could use the dense metal as a weapon.
Gold hit $US1001 an ounce in offshore trading early yesterday, boosted by gloom in global financial markets, a weak US dollar and supply issues.
Seen as a haven in times of economic turmoil, gold has been marching upwards since 2001, when it was just $US258 an ounce.
Savings & Loans Credit Union chief economist Tony Fioretti said while jewellery was generally not heavy enough to reflect gold’s gains, other gold investments had benefited from uncertainty in global financial markets.
“Gold will probably head a little higher, but how high it goes is hard to say,” he said.
Stockbroker Wesley Legrand said the world’s biggest gold producers had signalled the price was heading higher because they were spending millions of dollars cancelling their forward sales contracts so they could sell their gold at its current and future price instead.
Global gold production has not been enough to meet rising demand, particularly from India — the world’s biggest gold consumer — and elsewhere in Asia.
People invest in gold in two main ways — owning gold bullion directly and owning shares in gold companies.
“Gold bullion itself is a store of wealth, while gold shares offer a potential return on your investment,” Mr Legrand said.
Bullion can be bought from and stored at the Perth mint — a safer option than keeping it at home. There are also securities traded on the stock exchange that represent gold bullion.
Owning shares in gold miners is the easiest way to get exposure, but your investment is affected by other factors such as company performance.
Shares in Australia’s biggest gold producer, Newcrest Mining, have climbed from $3 to $37 in the past six years.
Gold bullion can be bought directly from the Perth Mint or other bullion dealers. Gold bars and coins are popular choices.
The Perth Mint also has a certificate program which allows legal title to gold stored at the mint. The minimum investment for this is $5000.
Gold securities — which represent a fraction of an ounce of gold — are traded on the stock exchange under stock codes such as GOLD and ZAUWBA.

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