The cheapest entry point into cheap gold

On Wednesday gold was hovering near five-and-half year lows struck last week at just under $1,100 and some analysts believe steeper declines are in the offing.

Recently, Kitco sat down with Jim Grant, the publisher of Grant’s Interest Rate Observer and one of the most respected and quotable commentators on Wall Street, to ask his opinion about gold.

First of all – he's "very bullish indeed".

Grant says that's because “you want to have exposure to the reciprocal asset of the paper assets that are the most popular – so gold, to me, is now the conjunction of price, value and sentiment.”

"Mr. Market is having a sale,” said Grant adding that the downward spiral is “terrifically vexing but a wonderful opportunity.":

"The important thing to recall is why those of us who own it, bought it. What is it about gold that ought to make it appealing – when it seems to be absolutely the thing you don’t want to have.” He added that gold thrives in the face of monetary turmoil, disorder and uncertainty, noting, “I think we have all three of these things.”

While he's invested in gold mining stocks Grant likes owning physical gold – particularly South African Krugerrands.

Goldcore points out in its commentary on the interview that Krugerrands are one of the cheapest and most cost effective ways to buy gold with very low premiums:

"Clients in Ireland, the UK, the U.S. and internationally are currently buying Krugerrands at extremely low premiums of just 2.5%. They remain some of the most popular bullion coins in the market due to their durability (harder 22-carat gold coin), recognisability, portability and liquidity throughout the world."

The coin (and the game park) is named after Paul Kruger, president of the Boer Republic of Transvaal, at the time of the Anglo-Boer wars at the turn of 19th Century following the Witwatersrand Gold Rush.

He is also credited with securing title and mineral rights for the Bafokeng people over lands that now constitute large swathes of the South African platinum belt, making the tribe, today led by the 15th direct descendant of the first king Sekete, the richest on the continent.

Watch the whole Kitco interview with Jim Grant here.