Christmas comes early for gold bulls as prices surge

In this week's market update:

• Gold prices surged this week, with the precious metal again topping USD $2,700 per troy ounce (oz).

• Silver also moved sharply higher, trading above USD $32oz in mid-week trade, before an overnight correction wiped out price gains seen for the week.

• Australian dollar investors also benefitted from the surge, with gold and silver topping AUD $4,200oz (gold) and AUD $50oz (silver).

• The strong move higher was met with a notable uptick in trade volumes across all channels at ABC Bullion, with clients busily adding precious metals to their portfolios, while some longer-term holders were happy to take profits on their existing positions.

• The rally in precious metals has gold and silver on track to record one of their strongest calendar year returns of the past three decades, with both metals up almost 30% in USD terms.

Record breaking year for gold as risk surges

Calendar year 2024 has been a record year for gold, with prices breaking out to all-time highs above USD $2,500 per troy ounce (oz).

The sharp move higher in gold, which has been matched by a corresponding increase in the silver price, has occurred against a backdrop of rising geopolitical risk and heightened fears about the trajectory of the global economy, with these factors combining to reignited safe-haven demand for the precious metal.

The move higher in precious metals has also occurred despite non-existent demand from the ETF market, which as at 6^th December this year is showing net outflows of almost 20 tonnes (-0.6%), though this was driven by outflows that were concentrated in the first six months of the year, with demand rising in H2.

We also continue to see modest positioning in the gold futures market, where gross longs are only +20% relative to a year ago, hardly a sign of excess froth or speculation.

Indeed, despite gold’s surge, it is safe to say most market participants have been more focused in the continued record run on Wall Street, with the S&P 500 also +28% YTD, while crypto-assets like Bitcoin are also enjoying a resurgence, not only in price gains, but fresh capital being deployed into the asset class.

That gold would do so well this year, despite the surge in other asset classes and a complete lack of speculative capital inflows bodes well for the entire precious metal asset class as we head into 2025.

Pod of Gold

It would not be Christmas without a beautifully timed podcast from my colleague Nicholas Frappell, Global Head of Institutional Markets at ABC Refinery.

He has just released his latest Pod of Gold, which was recorded on Thursday the 5^th of December, just before the recent price spike.

Nick looks at performance of the precious metal market in the aftermath of the Trump Presidential Election victory, and the potential outlook for gold as we head into 2025.

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:

• 00:00 – Introduction and Overview

• 01:24 – Recap of recent gold moves

• 03:34 – Managed Money Positioning

• 07:17 – Gold Targets

• 08:54 – $3,000 for gold?

• 10:08 – Global tensions on the precious metals price

• 15:28 – Key takeaways

Invest and save over the Christmas period

ABC Bullion is offering a specially curated selection of products at reduced premiums to coincide with Christmas. These products, which include minted gold bars from as small as 1-gram, through to 1oz silver coins like our recently launched Kiwi Blisterpack, can make for terrific gifts, as well as sound long-term investments given the historical performance of both gold and silver.  

The full range of products available as part of the ABC Bullion Christmas promotion can be found here. To purchase them, or indeed any other product in the ABC Bullion product range, 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 between 8.30am – 6.00pm (AEST) or Saturday between 10.00am – 3.00pm (AEST).

Jordan Eliseo
General Manager
ABC Bullion Australia

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