One of the factors underpinning gold’s recent rise is the growing level of sovereign debt in the US, according to Perth Mint chief Richard Hayes.
Speaking with the Australian Financial Review after unveiling a one-tonne gold coin outside the NYSE overnight, he said most commentators hadn’t cottoned onto the massive debt pile growing under the Trump administration.
“One factor is significantly falling bond yields here in the US, which makes gold a compelling consideration for portfolios,” Hayes was quoted as saying.
“There is also US sovereign debt. When Donald Trump assumed the presidency it was about $US18 trillion and it is around the $US23 trillion mark at the moment, so there is no doubt that quantitative easing is very much alive and well in this part of the world.”
He also added that the market was worried about the capacity of southern European countries to weather the storm of another financial crash.
There is currently $US130 million ($185 million) worth of gold in the Perth Mint Physical Gold ETF — with each share representing 1/100th of an ounce of physical gold held in the Perth Mint vaults.
The unit price of that ETF looks to be going up sooner rather than later, with Hayes telling the paper that the curiosity of institutional investors had been piqued.
The shares are trading in volumes of about 55,000 to 65,000 a day.
The ETF was listed last August when the gold price was $US1200, but has recently seen the gold price go up above $US1400 — with Australian investors getting a boost as currency weakness against the greenback pushed prices above the $AU2000 mark.
Aside from the gold ETFs of this world, a rising gold price has been a boon to a swathe of ASX-listed miners and explorers.
For example, shares in ASX-listed Saturn Metals (ASX:STN) have gone from 19c in March to 35c today (at the time of writing) — a rise of over 84 percent.
Saturn is a mineral exploration company that owns the Apollo Hill Gold Project, which comprises nearly 1,000 square kilometres of prime exploration ground near Leonora in the heart of the Western Australian goldfields.
This content is produced by Star Investing in commercial partnership with Saturn Metals. This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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