As the Australian dollar continues to lose momentum and fresh geopolitical storms affect gold trading, it wouldn’t be unreasonable to see the gold price above $AUD2,000 for a while yet.

In case you missed it, the precious metal hit a new high as it crashed through the $AUD2,000 mark in yesterday’s trade, literally a fortnight after it crashed through the previous record: $1,900.

With the Australian dollar currently riding low at 69c and the twin gold spurs of the prospect of low interest rates in both the US and Europe and geopolitical instability — gold is getting one heck of a boost.

Both the European Union and the US Federal Reserve have made noises about the trend for interest rates to go down, which would send cash yields lower — making gold an attractive option.

READ: Why Draghi is anything but a drag on gold

Meanwhile, overnight Iran moved to shoot down a US drone it said was flying in international airspace over the Strait of Hormuz.

It adds even more tension to the sabre-rattling between the pair, after two tankers in the Strait were sunk — with the US squarely blaming Iran for the sinkings.

READ: The new geopolitical tension driving gold

Add to the mix ongoing trade tensions between the US and China, with rare earths a notable flash point — and all the ingredients for a gold bull run have come in at exactly the same time.

Gold, traditionally seen as a ‘safe haven’ investment for its ability to keep its value, is often rewarded in times of financial or geopolitical instability as investors look for a place to keep their value safe.


This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.