Gold price hit record highs
By Mark Pey, Co-Founder & Director, Rush
Gold has shown impressive growth recently, with AUD prices rising 1.98% this week, and over 8% this month.
This growth has seen the price of gold zoom past the psychologically important AUD$3,000 and USD$2,000 benchmarks. Prices in Asian currencies have also hit all-time highs.
Many are not aware that gold has already outperformed many traditional investments over the last 25 years, with a remarkable 548% increase in USD compared to the S&P 500’s 297%.
Why is the price rising now?
Central banks globally have been increasing their gold reserves. They currently hold around 20% of all gold ever mined and made annual net purchases of 1,037 tonnes in 2023. This trend has been driven by ongoing economic and social uncertainties including the conflicts in the Middle East, runaway spending in the U.S., and the war in Ukraine.
In 2023, total gold demand reached a historic high at 4,899 tonnes, with the World Gold Council citing consistent demand for jewellery as well as significant investment activity as the key drivers.
Dealers have been impressed by the strength of demand across Asia, because Asian demand normally surges when prices are weak and dips when they are strong.
And ongoing real estate woes in China (where real estate is the main investment option) have also boosted the demand side.
Gold’s low correlation with traditional assets like stocks and bonds makes it a very useful diversification tool not just for institutions but also for investors seeking to boost returns and reduce volatility in their portfolios.
The last 24 hours have seen profit-taking and slighter lower price levels. But a research note from BofA yesterday said that “gold is still one of our favourite trades for 2024”. Other banks cited a very bullish mood in the gold futures markets, which often leads prices even higher.
There are many options to gain exposure to gold. Investors can opt for physical gold, such as bullion or coins, providing tangible ownership but requiring secure storage and insurance. Alternatively, gold ETFs offer convenience and liquidity, allowing investors to trade gold like stocks. Futures and options contracts provide exposure to gold price movements, albeit with higher risk and complexity.
24/7 liquid gold and silver
One innovative way to access gold is through the award-winning Rush App, which offers an intuitive platform to buy, hold, sell, spend, and even gift gold and silver, 24/7. With its user-friendly interface and comprehensive features, it provides a convenient solution for those seeking to capitalize on gold and silver’s potential.
The current surge in gold prices reflects a combination of global economic uncertainties and its enduring status as a safe haven asset.
