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This blog discusses The Perth Mint's bullion coins and bars, providing information about our latest designs, mintages, sales volumes and sell outs. On a broader front, we share relevant research and opinions for anyone interested in gold and silver bullion investing.

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Gold hits all time high in Australian dollars

Topics [ gold analysis gold prices gold bullion prices ]

Gold continued to rally last week, with the price in United States Dollars at one point surging beyond USD 1,350oz. In Australian dollars, it hit a new all-time high above AUD 1,950oz, continuing a strong upward trend that has been in play since late April this year.

The table below shows the price of gold and silver (in both AUD and USD), as well as the performance of the S&P500 and the ASX 200 over the past week, month and year. It shows gold outperformed equity markets, though silver lagged.

The rally in gold has been driven by a handful of factors which include - 

 • A continued plunge in global bond yields, with US 10 year bond yields now sitting at just above 2%. Since late 2018, the market value of debt trading with a negative yield has almost doubled and currently sits at approximately USD 12 trillion, according to a 17 June article published in The Financial Times. 

 • Expectations of monetary easing by the US Federal Reserve (Fed). Some economists see the Fed cutting interest rates as soon as July 2019, with PIMCO, the world’s largest bond fund manager, suggesting the Fed might cut rates by 0.50% if “tensions between the US and China are not at least scaled down before or during the G20 meeting in late June”.

 • Escalating geopolitical tensions in the Middle East, with two oil tankers attacked in the Gulf of Oman last week.

Australian dollar investors in gold have also received a boost from continued weakness in the local currency, which is back below USD 0.69. Markets are now pricing in at least two more interest rate cuts by the Reserve Bank of Australia (RBA) over the next year.

If the RBA delivers what the market expects, we may see added demand for precious metals, especially if it’s accompanied by continued media speculation about the potential for quantitative easing (increasing the money supply) in Australia.

High Profile Investors Turning to Gold

Given the recent rally in gold, it is no surprise to see it find favour among high profile investors. Stephen Innes, Head of Trading and Market Strategy for Vanguard Markets, stated in an article published on 17 June: “Gold is reclaiming its rightful status as a must-have safe haven asset in everyone’s investment portfolio”.

Innes went on to state that he is “unwaveringly bullish on gold and continues to buy as it remains one of my highest conviction trades into 2020.”

DoubleLine Capital’s Jeffrey Gundlach, known in financial markets as the “Bond King” stated he was long gold in an investor webcast last week. He noted that he expected the US dollar to fall between now and the end of 2019, while he also sees a greater than 50% chance the US will enter recession within one year.

Finally, billionaire Paul Tudor Jones, fund manager and founder of Tudor Investment Corporation has said gold is his favourite trade for the next 12-24 months. In an interview with Bloomberg last week, Jones noted that gold has “everything going for it” and that if the price can push through USD 1,400oz, it will get to USD 1,700oz “rather quickly”.

Of course, it must be said that prices aren’t guaranteed to rise and after a 5% rise over the past month, some consolidation would not be unexpected. Nevertheless, we remain optimistic about the medium to long-term outlook for gold. We believe it should be on the radar of most investors given its unique qualities and the benefits it can bring to well diversified investment portfolios.


Sources:

Gundlach Quote

https://www.cnbc.com/2019/06/13/bond-king-jeffrey-gundlach-i-am-certainly-long-gold.html

Tudor-Jones Quote

https://www.kitco.com/news/2019-06-12/Gold-Price-Going-To-1-700-Soon-Says-Billionaire-Paul-Tudor-Jones-Bloomberg.html

https://www.youtube.com/watch?v=iNjOptP7jJ4

Negative Yielding Debt

https://www.ft.com/content/cf39a9a4-8ea2-11e9-a24d-b42f641eca37

Stephen Innes

https://www.fxstreet.com/analysis/gold-fever-is-spreading-201906170714

Disclaimer

Past performance does not guarantee future results.

The information in this article and the links provided are for general information only and should not be taken as constituting professional advice from The Perth Mint. The Perth Mint is not a financial adviser. You should consider seeking independent financial advice to check how the information in this article relates to your unique circumstances. All data, including prices, quotes, valuations and statistics included have been obtained from sources The Perth Mint deems to be reliable, but we do not guarantee their accuracy or completeness. The Perth Mint is not liable for any loss caused, whether due to negligence or otherwise, arising from the use of, or reliance on, the information provided directly or indirectly, by use of this article.



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No going backwards for the Australian Emu bullion coin series

Topics [ silver bullion coins Australian Emu gold bullion coins ]

Following the success of our first gold and silver bullion coins portraying the world’s second largest bird, The Perth Mint is excited to unveil 2019 versions of the Australian Emu.

Featuring an appealing new reverse design, the coins depict a pair of emus in an arid Australian landscape. Superb detailing highlights the native birds’ shaggy-looking plumage, which helps them survive the extreme changes in temperature that can be experienced in the outback.

It is often cited that the emu cannot walk backwards. Together with the kangaroo, another Australian native animal that only moves forwards, it was chosen to represent the nation as an heraldic supporter on the Australian coat of arms in 1908.

Superbly struck, the 2019 Australian Emu bullion pair offer investors an outstanding opportunity to acquire 99.99% pure gold and 99.99% pure silver in the trusted form of legal tender coinage. With just 5,000 gold coins and 30,000 silver coins available, chances to purchase are limited.

To secure 2019 Australian Emu bullion coins, registered clients are invited to place orders on www.perthmintbullion.com. Purchasers in Australia can also call The Perth Mint customer services on 1300 201 112, or visit our Bullion Trading Room in person at 310 Hay Street in East Perth.

Authorised distributors include Bullion Money in Australia and, for overseas customers, Metal Market Europe.



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Safety-conscious Swiss put faith in gold

The Swiss franc is traditionally seen as a safe haven for investors in times of geopolitical and/or market uncertainty.

The country’s steady economy and relatively low levels of national debt have helped the Swiss franc hold up time and again during times of crisis.

Proud of the currency’s role in their nation’s fortunes, it’s a fair bet that the financially literate citizens of Switzerland know how to protect their wealth as well as anyone.

So it’s interesting to note the results of a nationwide study released this month showing they are big fans of gold, ranking the yellow metal second on a list of preferred forms of investment.

According to the University of St Gallen-led research, 53% of participants favoured real estate, but gold was a close second with 48% recognising its vital role in a portfolio.

Shares, funds and cash attracted votes from 30%, 25% and 24% respectively. Silver took 13th place on the list and platinum finished in 19th spot.

According to the report’s authors: “Low interest rates, the fading attraction of classic forms of saving such as the savings account, as well as economic and political uncertainties are the hallmarks of today’s financial market. Against this background, investors increasingly rely on physical precious metals since this form of investment is regarded as inflation-proof and as an iron ration in times of crisis.”

Underlining the country’s faith in the ongoing relevance of gold, almost one in five Swiss nationals said they were planning to invest in precious metals in the coming twelve months.



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Monthly Sales – May 2019

Topics [ Monthly sales figures ]

Total ounces of gold and silver sold by The Perth Mint in May 2019 as coins and minted bars:

  - Gold (Au): 10,790 oz

  - Silver (Ag): 681,582 oz

NB This chart shows total monthly ounces of gold and silver shipped as minted products by The Perth Mint to wholesale and retail customers worldwide. It excludes sales of cast bars and other Group activities including sales of allocated/unallocated precious metal for storage by the Depository.



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Gold at all-time highs as RBA cuts cash rate to record lows

Gold prices in Australian dollars hit an intra-day all-time high this morning, pushing above the AUD 1,900 per ounce mark for the first time.

Gold prices have rallied over the past week as fears about a slowdown in global growth and continued uncertainty regarding a global trade war have negatively impacted on risk assets.

Since early May 2019, the S&P500 has fallen almost 7%, with gold benefitting from safe haven asset flows, alongside government bonds.

Adding further fuel to the recent upside in the gold price is the recalibration of interest rate expectations in the United States, with markets now expecting up to two interest rate cuts by the Federal Reserve in 2019.

For Australian investors, expectations of lower rates have become reality, with a widely anticipated reduction in the official cash rate by the Reserve Bank of Australia (RBA) taking place earlier today.

The decision by the RBA puts the local cash rate at a record low of just 1.25%. This will likely reinforce the case for gold in the minds of many investors who are looking for alternative assets in an environment where the 'real' return on cash is close to, and in many cases below, zero.

These trends are likely to remain in place for some time, with markets currently expecting the RBA will follow up today’s interest rate cut with at least one more before Christmas 2019. Some forecasters, including JP Morgan, are even more bearish, recently stating that the cash rate may be cut all the way to just 0.50% within a year.

While the market impact of the latest moves in monetary policy is uncertain, we expect the strong demand for gold to continue and reinforce the role it can play in a well-diversified investment portfolio.



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