Records smashed as gold powers higher!

In this week's market update:

• Gold prices surged by 4% this week, with the precious metal hitting a series of all-time highs as it pushes toward USD $2,700 per troy ounce (oz).

• Silver was also stronger, rallying by 3% to USD $32oz, with the gold to silver ratio currently sitting at 84. The recent move in silver has pushed prices in USD terms to a 12 year high, with policy stimulus in China another tailwind that will drive the market going forward.

• Returns in Australian dollars were slightly more modest, owing to a 1% rise in the local currency, which last traded at USD 0.686.-

• The September rally in precious metals has now seen the rolling 12-month performance of both gold and silver top 40% (in USD terms). This is one of the strongest 1 year moves on record for the sector.

• Risk assets also continue to rally, with the S&P 500 +1% for the week, and +34% over the past twelve months, with precious metals only beginning to outperform on a relative basis.

• The market continues to be driven by the 50 basis point cut in interest rates announced by the US Federal Reserve, with the World Gold Council noting that lower rates reduce the barrier for Western investment into gold, with the monetary easing cycle that we have now entered likely to support the precious metal sector in the medium to long term.

• The potential for further investment, and much higher allocations into gold from Western investors does suggest substantial upside remains in the precious metal sector, though investors should expect volatility along the way, especially with gold trading well above moving averages.

• Astute investors are likely to treat any pullbacks in precious metals as buying opportunities, given the primary bull market trend that looks set to play out in the years ahead.

Pod of Gold

My colleague Nicholas Frappell, Global Head of Institutional Markets at ABC Refinery, released his latest Pod of Gold this week. Titled “Gold’s Surge, Fed Cuts, and Japan’s Next Move: Navigating USD$2,600 and Beyond”, the podcast covers a range of areas that are highly topical and relevant to the gold market today.

There is also a section on the Reserve Bank of Australia, and the Australian dollar, two factors that are particularly important to ABC Bullion clients.

As always, it is a must listen for those wanting to stay abreast of developments in the gold and silver markets, as well as broader macro themes impacting the economy and investment markets.

Timestamps are below:

• 00:00 – Introduction

• 01:03 – Fed’s 50 basis point rate cut and its impact

• 08:00 – Gold surpasses US$2,600: What’s next?

• 11:10 – Is gold going higher?

• 16:39 – China’s economic slowdown and its effect on gold

• 22:35 – Japan's monetary policy outlook

• 25:57 – Australian Dollar and RBA dynamics

• 29:51 – Key takeaways and closing remarks

• 31:55 – Continue sending in your questions!

September Silver Special – Only 4 days Left            

ABC Bullion are offering reduced premiums on select products in our silver range, including the 5-kilo ABC Bullion cast bar. This product, the largest bar in our range, provides exceptional value, and is available from as little as $200 above spot.

To access the 5-kilo ABC Bullion Silver Cast Bar, as well as other products, simply login to your account at abcbullion.com, with our website offering 24/7 access to the precious metal market.

Alternatively, please feel free to call the ABC Bullion sales and client services team on 1300 361 261 Monday - Friday 8:30am - 6:00pm (AEST) or Saturday 10:00am – 3:00pm (AEST).

Jordan Eliseo
General Manager
ABC Bullion Australia

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