Who buys gold bullion?
If the movies are to be believed, gold bullion is reserved for super wealthy villains such as Goldfinger, but bullion trader Marianne Findlay from New Zealand Mint (NZ Mint) paints a very different picture.
Sunday, August 1st 2010, 1:44PM
Marianne says "Really there is no "type" for gold investors. I deal with everyone from high net worth international clients to average kiwi families and young entrepreneurs. I spend my day talking to people from all walks of life."
Buyers have all sorts of motives too; Mike O'Kane head bullion trader for NZ Mint explains "We have clients who want to diversify, those who have been burned in the past by share markets and others who only trust something they can get their hands on.
There is no shortage of reasons that clients buy gold either, including:
- Hedging against inflation
- Balancing an investment portfolio
- Investing in something that can be passed down through generations
- Taking advantage of capital gains
"Clients' motivations for buying gold and their total holdings will determine how much they buy. The general recommendation is that investors hold 5-10% of their total portfolio in physical gold."
Entering the gold market can be daunting for some. Knowing whether the price is high or low at any given time and whether it is going up or down is the biggest barrier.
"New buyers are always asking me where the price is going. While I can't predict which way it is going from one day to the next, we do have some strategies for beginners" explains Mike.
"Price averaging is one popular strategy for buying gold. This is where people buy incremental amounts on a regular basis. The theory is that their price will reflect a good average, rather than taking the risk on one big purchase. While this isn't guaranteed to give them the lowest possible price, it does remove some of the risk of buying too high."
"More than anything else, we recommend that people do their own research. There are lots of charts available showing historical and live data, including the ones on our website. Just watching the gold price every day can give buyer a good idea of when to buy."
There are lots of options for getting exposure to gold. There are gold funds, mining shares, and bullion. NZ Mint specialises in physical bullion coins and bars.
Gold and Silver coins made by the Mint are 99.99% pure gold, making them GST exempt. Some international bullion products are not pure enough to be GST exempt in New Zealand, so it is important to check what you are buying is 99.5% or higher for gold and 99.9% pure or better for silver.
Selling only certified and internationally recognised bars, NZ Mint are the exclusive NZ distributor for PAMP Suisse, who is the world's leading independent refiner of precious metals.
If keeping your gold under a mattress doesn't quite suit, NZ Mint offers storage options tailored to your needs. You can rent your own safety deposit box or use one of their insured storage options (hyperlink to http://www.nzmint.com/bullion/products/storage).
Marianne says "New clients are always surprised how easy it is to buy gold, they call us and secure a price, confirm payment and we arrange for pick up or delivery. It is really that simple."
Buying gold is as easy as picking up the phone during working hours and calling 0800 NZ MINT (696468). So what are you waiting for?
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