Gold for Aussie investors (FX risk...) - Aussie Stock Forums

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  1. #1

    Default Gold for Aussie investors (FX risk...)

    Hi, i'm fairly new to this stuff (and new to this forum ) but after doing a bit of reading (namely crash proof by Peter Schiff, http://www.chrismartenson.com/crash-course and various other web sources) I subscribe to the view that the USD is in serious trouble in the not too distant future will crash under the U.S. debt burden and the actions of the fed. As a result I have become interested in gold as an investment.

    Say, after a short period of deflation, high inflation and possibly hyperinflation takes hold in the US. US citizens would no doubt be climbing over each other to get their hands on physical gold in an effort to preserve their wealth causing the price of gold to sky rocket. However, at the same time the rapidly weakening USD would depreciate substantially against the AUD. So while gold is increasing in USD, USD are worth less in Australian dollars.

    So my question is this - assuming the above scenario does in fact happen would an Australian that was already holding gold realise a good return on their investment or would the weakness of the USD in terms of the AUD essentially wipe out any gains?

    I assume that if the price of gold is rising in real terms its gains will outweigh any currency risk ie the nominal rise in gold in the US will outweigh the decline in the USD making it a worthwhile investment for Australians. Is this the case or am I completely off base? Hopefully I explained it ok.

    I'd appreciate the thoughts and comment of those that are wiser and more knowledgeable than myself

    Thank You!

  2. #2
    hoarding tinned food kennas's Avatar
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    Default Re: Gold for Aussie investors (fx risk...)

    This might be better contained in the Gold..where is it going? thread.

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