Blair Hannon (pictured), Head of Investment Strategy at Global X ETFs Australia shares his thoughts on the recent surge in gold prices.
Hannon said, “Trading volumes in Australian gold ETFs have hit highs last seen during the Covid-19 pandemic. More than $75 million of Global X Physical Gold (ASX: GOLD) changed hands on Wednesday, making it the most heavily traded ETF in the country. Last week, North America and European gold ETFs – the main barometer for global investor demand for gold – posted the biggest inflows in a year. However Australian gold investors have gone the other way and been net sellers of gold, with ASX-listed gold ETFs seeing outflows in recent weeks.”
“As these outflows come at a time the gold price sits near record highs, it suggests Australian investors are using high prices as an opportunity to take profits. And as gold has been one of the better-performing assets in investors’ portfolios this year, some investors may also have to sell gold to rebalance. Gold is currently trading near US$2,000 driven by a perfect storm of systemic risk, ongoing weakness in the US dollar, and market expectations of more dovish central banks.”