Gold Near Record High…Now What?

Gold popped overnight.

The yellow metal is trading for US$1,605.70 per troy ounce. That’s an almost seven year high in US dollar. Though it’s not a new record in US dollars. That record was hit back in September 2011, when gold reached US$1,895 per ounce.

But, with the weak Aussie dollar, gold is right back in record high territory in our dollar terms, at AU$2,398.71 per ounce. And that’s what matters for Australian investors. And more importantly for Australian based gold miners.

Have a look at the one year gold price chart below (in US dollars):

Source: Bloomberg

What’s next for gold?

Over the past 12 months gold has beat the ASX 200 performance by more than 1%. And that’s from an asset classically known for its safe haven status.

Now that doesn’t mean gold can’t go down in price as well. But with geopolitical tensions on the rise across the world, gold has clearly been one of the winners.

Since a recent low on 22 May 2019 gold has gained 26.1%.

Many gold miners have seen their share prices gain far more. You see, miners are leveraged to the price of gold. There fixed costs are just that…fixed. So when the price of gold rises, most of that price rise goes straight into their profit margin.

Of course, not all gold miners have gained more than 26% since last May. Some have even seen their share price tumble. Which is why we urge readers to do their own thorough research before investing a single dollar into any stocks.

If you’re looking at investing in Aussie gold stocks, The Rum Rebellion editor Greg Canavan can help steer you in the right direction.

You can download Greg’s free report, ‘How to Pick Winning Gold Stocks’ here.


Bernd Struben is an Editor of The Rum Rebellion. In this capacity, he has access to one of the most intriguing and powerful networks of practical investment insight anywhere in the world. Bernd has worked on four different continents, and has more than 20 years of professional finance, editorial, and management experience. He holds a degree in economics.


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