Metals surge as gold tests new highs!

Fri Aug 02 2024

 

In this week's market update: 

 

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Mark your calendars


Precious metal prices rallied strongly this week, with gold pushing back toward all-time highs, as tensions in the Middle East and market expectations around the commencement of an interest rate cutting cycle by the US Federal Reserve (the Fed) combined to push the yellow metal higher.


Silver was also bid up, though could not match the move in gold, with a +2% rally in USD terms seeing it climb back toward USD $28.50oz, with the gold to silver ratio rising to 86 in the process.


While the Fed did not come through with a rate cut in their just completed policy meeting, a move lower in September seems all but assured. Indeed markets are now pricing in multiple rate cuts between now and the end

of 2025, with comments from Fed chair Jerome Powell doing nothing to dissuade market participants from their belief that easier policy is just a few weeks away.


If history is any guide, that is likely to be very supportive of higher precious metal prices, with investment into both gold and silver also likely to benefit given rate easing cycles often see major drawdowns in risk assets.

In other precious metal related news this week we have seen:

The report also noted that:

 

The investment flows noted by the World Gold Council were also addressed in a recent article in Yahoo finance, which noted that family offices in Asia were a major contributor to strong OTC demand for physical bars

and coins, with gold long seen and favoured as a trusted store of wealth in the region.



Chart of the Week


The Gold Demand Trends report contains a treasure trove of charts and data to highlight recent trends in the gold market. The report has a special chart section available for download, with this quarter highlighting:

 

That final point is illustrated in the chart below, which shows that retail investment into physical bars and coins in China hit its highest level in over a decade and ran at almost double the ten-year average.

 

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While most commentators in western markets continue to look at the US Dollar, bond yields, inflation rates and the relative strength of the US equity market, it is clear that Eastern markets are exerting ever more influence over the gold price.


That bodes well for future price growth.


Inside the Office


Market volumes at ABC Bullion were incredibly healthy across July, with investors busily positioning their portfolios for the new financial year. This continued through to the final week of the month, with ABC Bullion seeing solid trade across online, phone and in-store channels.


On the investment side, the ABC Bullion gold cast bar range continues to lead the way, with more and more investors showing a preference for the smaller products, led by our signature 1oz ABC Bullion gold cast bar.

We are also seeing great interest in the ABC Bullion minted tablet range, with investors that have a more modest budget particularly keen on these products.  


On the silver front, we continue to see meaningful investments into our 5kg ABC Bullion silver cast bar, with larger investors often gravitating toward these products, while pool allocated silver remains a popular choice.


We’ve also been delighted to see huge interest in our just launched Untamed Landscape silver coins, a limited mintage series that features a range of animals to celebrate the fauna and natural landscape of the Oceania

region.  

Jordan Eliseo

General Manager

ABC Bullion Australia


Disclaimer: This document has been prepared by Australian Bullion Company (NSW) Pty Limited (ABN 82 002 858 602) (ABC). The information contained in this document or internet related link (collectively, Document) is of a general nature and is provided for information purposes only. It is not intended to constitute advice, nor to influence any person in making a decision in relation to any precious metal or related product. To the extent that any advice is provided in this Document, it is general advice only and has been prepared without taking into account your objectives, financial situation or needs (your Personal Circumstances). Before acting on any such general advice, we recommend that you obtain professional advice and consider the appropriateness of the advice having regard to your Personal Circumstances. If the advice relates to the acquisition, or possible acquisition of any precious metal or related product, you should obtain independent professional advice before making any decision about whether to acquire it. Although the information and opinions contained in this document are based on sources, we believe to be reliable, to the extent permitted by law, ABC and its associated entities do not warrant, represent or guarantee, expressly or impliedly, that the information contained in this document is accurate, complete, reliable or current. The information is subject to change without notice, and we are under no obligation to update it. Past performance is not a reliable indicator of future performance. If you intend to rely on the information, you should independently verify and assess the accuracy and completeness and obtain professional advice regarding its suitability for your Personal Circumstances. To the extent possible, ABC, its associated entities, and any of its or their officers, employees and agents accepts no liability for any loss or damage relating to any use or reliance on the information in this document. It is intended for the use of ABC clients and may not be distributed or reproduced without consent. © Australian Bullion Company (NSW) Pty Limited 2020.

 

Source: https://www.abcbullion.com.au/