Gold rallies as markets bounce!

In this week's market update…

• Precious metal prices rallied sharply this week, with gold +3% in USD terms to USD $1,868.60 per troy ounce (oz).

• Silver was also stronger, climbing by +3% toward USD $22oz, with the gold-silver ratio unchanged at 86.

• Equities were also stronger. Markets in both the United States and Australia +2% over the past five trading days.

• Commodities also bounced +2% as whole, with oil finding its footing just above USD $80 per barrel.

• Bond yields eased marginally, with US 10-year Treasuries currently trading at 4.70% after a seemingly relentless rise since early August that coincided with strong USD strength.

Interview with The World Gold Council

On Monday 9th October I was honoured to welcome John Reade, Chief Market Strategist at the World Gold Council, to our Global Flagship store located at 38 Martin Place in Sydney.

John was kind enough to sit down with me for a 20-minute interview where we discussed a range of topics relevant to precious metal investors, including:

• The recent sell-off in gold, and why it has in-fact performed very well given the headwinds of higher bond yields and a higher USD.

• The encouragement that can be drawn from gold holding support at USD $1,800oz thus far.

• The importance of central bank buying, and how it is keeping the metal market buoyant.

• The various elements of Chinese demand and why gold remains a go-to asset for households.

• Pockets of weakness in the gold demand picture today, and why higher inflation and interest rates are holding back purchases in some parts of the world.

• Positioning in the ETF and futures market, and why it means a potential source of fragility in the gold market is no longer evident.

• The role of gold producer hedging, how it has changed over the years and how it may impact gold going forward.

Please click the link here to access the video in full.
 
Inside the office

The spike in the gold price over the past five days has encouraged a significant boost in turnover, with retail clients as well as SMSF trustees and HNW investors all adding to their precious metal holdings, with gold leading the way demand-wise.
 
At a product level, 1oz ABC gold cast bars and 50-gram ABC gold bast bars have been particularly popular, as have ABC Luong and ABC Taels, which are both 37.5gram gold products. For larger investors, 1 kilo bars remain a key addition to portfolios, while on the silver side, demand has been driven by 1 kilo ABC Bullion silver cast bars.
 
We’ve also seen a spike in demand for Royal Mint gold. A range of these items from 1/10oz through to 1oz Brittania products have been popular with reduced premiums, as well as a set of 1oz gold products containing a King or Queen on each coin.

Jordan Eliseo
General Manager
ABC Bullion Australia

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