Gold & Silver FAQ’s

What is bullion? 
Bullion refers to precious metals in bulk form which are regularly traded on commodity markets.  The value of bullion is typically determined by the value of its precious metals content, which is defined by its purity and mass.  Bullion is the basic commodity traded in the precious metals market, usually assessed by weight, typically cast as ingots or bars, and sold by major banks and trusted dealers. You can also trade bullion as coins. The best known bullion coins are the American Gold Eagle, the Canadian Maple Leaf, the Australian Gold Nugget, and the South African Krugerrand. Their value is based on their gold or silver bullion content. Prices fluctuate daily, depending on the price of gold and silver in the world markets.

Where does Morris & Watson obtain the bullion?
Morris and Watson Ltd is New Zealand’s largest refiner, refining locally sourced raw material, while paying competitive prices for used jewellery and bullion for processing.  All Morris and Watson’s ingots are cast and refined inhouse, using advanced methods improved over three generations. This ensures that each bar can be confidently stamped and guaranteed for utmost purity before leaving the premises.

Who sets the standards for bullion?
The London Bullion Market Association sets and promotes quality standards for gold and silver bullion bars. The minimum acceptable fineness of the Good Delivery Bars is 99.5% for gold bars and 99.9% for silver bars. Morris and Watson’s Gold is consistently “Four Nines” (99.99%).  – (Note 100% pure bullion is impossible, as there will always be a small trace of impurities).

Why choose Morris & Watson for bullion investment?
When buying Gold or Silver Bullion through Morris and Watson you can do so with peace of mind, as it’s likely your local jeweller sources precious metal from the same place. Morris and Watson’s quality and reputation is second to none in Australasia’s wholesale market. Our integrity has been a corner stone foundation of the business. This integrity, along with our quality and service, has made Morris and Watson the first choice in precious metals for over 80 years.

Why buy Gold? Why buy Silver?
Owning precious metals as an investment is a prudent way of preserving your purchasing power. Gold’s value, in terms of the real goods and services that it can buy, has remained remarkably stable for centuries. In contrast, the purchasing power of many currencies has generally declined, due for the most part to the rising price of goods and services. Hence investors often rely on gold to counter the effects of inflation and currency fluctuations.  Physical bullion is a reliable and trustworthy asset, and is therefore an insurance against today’s monetary turmoil.

Whether you are conservative or aggressive in your investment approach, precious metals can represent an important part of your asset allocation. No matter what level of risk an investor wishes to take, every portfolio needs a secure foundation.  For centuries, particularly during times of financial stress and the resulting flight to quality, investors have sought to protect their capital in assets that offer safer stores of value. As a wealth preserver, gold’s stability remains as convincing as ever for today’s investor.  As one of the few financial assets that does not rely on an issuer’s promise to pay, gold offers protection from widespread default risk. It offers investors insurance against extreme movements in the value of other asset classes.

It is a widely accepted investment principle that any serious investor should hold at least 10-15% of his portfolio in precious metals. By including precious metals to a portfolio of stocks, bonds and mutual funds, an investor is introducing a tangible or real asset to the asset mix. This increases the degree of diversification and protects the portfolio against fluctuations in value of any one asset type.

Give me an example of a typical gold/silver investor.
There is no typical profile of someone investing in precious metals. While there maybe many reasons why someone would want to invest, an investor can be anyone. There are few barriers to investing so opportunities are there for anyone.

How can the average investor distinguish between the good gold firms and the bad?

  • Certification? Governance?
  • Complaints record, how many and what was the outcome?
  • Solid track record
  • Keeping you informed
  • Avoid ‘too good to be true’ sales pitch

What is the biggest mistake investors make when starting out as gold owners?
Single-handedly, the biggest trap investors fall into is buying a gold investment that bears little or no relationship to their objectives.

For example – a regular person wishes to buy gold or silver to diversify their portfolio or perhaps they just really want to own some physical gold.

But too often this same investor ends up with a handful of exotic rare coins, or a leveraged (financed) gold position, or trading in gold futures, which for some amounts to little more than a bet on the gold price and a poor substitute for actually owning the physical gold itself. Our advice? Find a respected dealer (like Morris & Watson) and always remember your investment objective.

 

Contact:

Adam Van Sambeek

+64 9 634 2035 Ext 205
0800 500 654
adam@morrisandwatson.co.nz