Will the price of gold continue its upward trend?

Tony Coleman discusses the rise of gold and what this could mean for New Zealanders.

Gold is experiencing a significant surge, and experts suggest this is more than a fleeting trend. Global economic shifts and increasing uncertainty around traditional currencies are driving investors towards this asset, as gold has historically been seen as a store of value, though gold prices can fluctuate significantly in the short term. This shift then points to changes in the world’s financial landscape and the attitudes of investors.

A combination of macroeconomic and political factors is fuelling gold’s upward momentum. Rising inflation risks, interest rate uncertainty, and global trade tariffs are all contributing to increased demand. According to a recent report from asset management firm Sprott, these dynamics have created a case for gold. One of the less-discussed drivers is a potential shift in the global financial balance of power. For decades, the US dollar has dominated international finance. However, faith in G7 currencies is showing signs of wear. “While we have central banks bulking their gold reserves, confidence in the US dollar collapsing amid their inflation woes and tension in the Middle East, you’ll see more investors fortifying their portfolios with gold,” says Tony Coleman, Managing Director at New Zealand Gold Merchants.

Local experts believe that a steady, incremental approach is the most effective way to build a holding in precious metals.

One of the less-discussed drivers is a potential shift in the global financial balance of power. For decades, the US dollar has dominated international finance. However, faith in G7 currencies is showing signs of wear. “While we have central banks bulking their gold reserves, confidence in the US dollar collapsing amid their inflation woes and tension in the Middle East, you’ll see more investors fortifying their portfolios with gold,” says Tony Coleman, Managing Director at New Zealand Gold Merchants.

This erosion of confidence is happening alongside the growing influence of economic blocs like BRICS (Brazil, Russia, India, China, South Africa, and newer members). This coalition, which represents a significant portion of the world’s population, is exploring alternatives to the US dollar-based system. Some analysts suggest this could lead to a new financial framework, possibly backed by gold, further diminishing the dominance of traditional fiat currencies.

“Gold is not an investment but stored wealth,” Coleman explains. “It is the ultimate money as it has no leverage, unlike fiat currencies and that means it does not get inflated away. That makes it a highly stable means of storing wealth.” This unique quality makes gold an effective hedge against the currency debasement that can result from massive government spending and quantitative easing.

As financial commentator Peter Schiff noted for King World News, the real reasons for gold’s rise are often misunderstood. He argues that factors like rising unemployment, swelling federal deficits, and a weakening dollar are setting the stage for persistent sticky inflation, making gold an essential component of any wealth protection strategy.

So, what does this global trend mean for New Zealanders? It presents an opportunity to diversify investment portfolios in a climate of currency volatility. For many, the idea of buying gold can seem intimidating or reserved for the ultra-wealthy. Local experts believe that a steady, incremental approach is the most effective way to build a holding in precious metals.

For those looking to begin their precious metals journey, services like GoldSaver offer a straightforward path.

“New Zealanders hold over $200 billion in term deposits. With inflation and currency pressures, the real return can often be close to zero. Some investors choose to hold around 10% in gold as a way to diversify their portfolios.” says Coleman.

“Smart money purchases frequently in regular intervals, rather than dropping a large lump sum in a single transaction,” says Coleman. This strategy, known as dollar-cost averaging, allows an investor to smooth out price fluctuations over time and build a position without trying to “time the market”.

To make this strategy accessible, New Zealand Gold Merchants (NZGM), a family-run company with roots going back to 1975, has introduced a savings tool called GoldSaver. This platform allows Kiwis to start accumulating physical gold with regular contributions from as little as $50 per month. Investors can set up weekly, fortnightly, or monthly purchases, making ownership attainable for a wide range of people.

The GoldSaver accounts are pooled, giving participants a share of physical gold bullion securely stored in NZGM’s vaults. The platform provides full transparency, allowing account holders to track their holdings and transaction history online. When they decide the time is right, they can sell gold back to NZGM for cash or convert their savings into physical bars or coins. The service has no management fees, with storage and insurance costs covered by NZGM.

For those looking to begin their precious metals journey, services like GoldSaver offer a straightforward path.

To find out more, visit GoldSaver.

Note: GoldSaver is a regular savings plan that allows customers to purchase and store physical gold. It is not a managed investment scheme

Disclaimer: Past performance is not a reliable indicator of future performance. Returns may go up or down and are not guaranteed.