WEBVTT - Gold: Can it keep going up? 0:00:09.000 --> 0:00:12.120 Hello, and welcome to The Australian's Money Puzzle podcast. I'm 0:00:12.200 --> 0:00:16.840 James Kirkby. Welcome aboard everybody. Now, the outstanding investment in 0:00:16.920 --> 0:00:20.680 recent times has been gold, gold in any form, gold bars, 0:00:20.720 --> 0:00:24.959 gold bullion, gold coins. For most of our listeners it 0:00:25.000 --> 0:00:29.800 would be gold based exchange traded funds and listed gold miners. 0:00:30.680 --> 0:00:33.600 Even this year to date, gold is up at about 0:00:33.920 --> 0:00:36.919 twenty three percent so far. This is over the year 0:00:36.960 --> 0:00:39.680 to date the ASX is up by about two percent. 0:00:39.720 --> 0:00:44.520 It's moving ten times faster. My guest today, appropriately enough, 0:00:45.080 --> 0:00:47.559 is oh a man I called mister Gold. We've known 0:00:47.560 --> 0:00:49.080 each other for a long time. I used to talk 0:00:49.120 --> 0:00:51.920 to him at the Perth Mint at various other jobs 0:00:51.960 --> 0:00:54.440 over the years. He is now the general manager of 0:00:54.600 --> 0:00:57.960 ABC Bullion. That is the place where there was recently 0:00:58.040 --> 0:01:01.200 queues outside the front door at Martian Place in Sydney, 0:01:01.240 --> 0:01:02.960 which gives you some idea of what's going on in 0:01:02.960 --> 0:01:03.360 this area. 0:01:03.400 --> 0:01:06.160 How are you, Jordan Lovely to love it to be here, James, 0:01:06.200 --> 0:01:07.720 thanks for the invitation. 0:01:07.800 --> 0:01:08.399 You're welcome. 0:01:08.640 --> 0:01:11.520 And Jordan Alicia Folks as I see, he's a deep 0:01:11.520 --> 0:01:13.720 specialist in gold and he's stuck with it all his 0:01:13.840 --> 0:01:17.080 career to the listener who's just starting to find out 0:01:17.120 --> 0:01:20.680 about good just tell us, first of all, what's been happening. 0:01:20.720 --> 0:01:23.320 They qualify if you with the price change that we've seen. 0:01:23.520 --> 0:01:24.039 Certainly so. 0:01:24.080 --> 0:01:27.720 If you look in Australian dollars through to the end 0:01:27.800 --> 0:01:33.720 of April, the price returned for gold was around forty 0:01:33.720 --> 0:01:36.440 five percent for the year, so it had gone from 0:01:36.959 --> 0:01:40.760 around three thousand, five hundred dollars an ounce to about 0:01:40.840 --> 0:01:44.680 five two hundred dollars an ounce in that one year period, 0:01:45.600 --> 0:01:48.280 about double the return of silver. Silver had done pretty 0:01:48.280 --> 0:01:52.720 well as well, but it was only up about twenty percent. Obviously, 0:01:52.760 --> 0:01:55.480 prices have pulled back a little bit in the last 0:01:55.480 --> 0:01:58.640 two weeks, so we've seen a correction that was very 0:01:58.720 --> 0:02:02.560 much expected given just how fast gold had run. But 0:02:03.840 --> 0:02:07.000 the strong performance of gold isn't just isolated to the 0:02:07.120 --> 0:02:10.440 last the last twelve months. If you look at sort 0:02:10.440 --> 0:02:16.200 of three year, five year or ten year returns, you're 0:02:16.240 --> 0:02:20.240 talking around over three years about twenty four percent per 0:02:20.280 --> 0:02:23.720 annum annualized, which is about ninety percent in total, and 0:02:23.760 --> 0:02:27.760 the ten year number is about thirteen percent annualized, which 0:02:27.760 --> 0:02:30.920 if you compound for ten years, comes out at almost 0:02:30.919 --> 0:02:32.320 two hundred and fifty percent. 0:02:33.080 --> 0:02:34.080 The price is rallied. 0:02:34.280 --> 0:02:37.120 Wow, we're talking strictly good billion here, that's right in 0:02:37.200 --> 0:02:39.120 Australian dollars, are in US dollars. 0:02:38.919 --> 0:02:41.880 Yeah, no, that's the Australian dollar return in the last 0:02:41.880 --> 0:02:45.760 twelve months. The return in US dollars has basically been 0:02:45.800 --> 0:02:48.680 the same. So whilst the currency moves up and down 0:02:48.720 --> 0:02:51.680 on a daily basis, actually over the last twelve months 0:02:51.680 --> 0:02:54.200 it's been relatively stables. 0:02:54.280 --> 0:02:55.000 As a whole. 0:02:55.520 --> 0:02:58.720 If you take the ten year window, the Australian dollar 0:02:58.760 --> 0:03:03.160 gold price has outperformed the US dollar goal price, and 0:03:03.200 --> 0:03:05.840 that's largely a function of the fact that obviously the 0:03:06.200 --> 0:03:09.680 Aussie has been under pressure really since it peaked back 0:03:09.720 --> 0:03:12.000 in twenty eleven, when you know, back then you could 0:03:12.040 --> 0:03:13.840 get a I think it was almost at a dollar 0:03:13.919 --> 0:03:17.440 ten versus the American dollar, and now it's closer to 0:03:17.480 --> 0:03:18.360 sixty five cents. 0:03:19.480 --> 0:03:23.760 So the weakness of the Australian dollar against the US 0:03:24.240 --> 0:03:29.840 is actually propelling this even faster. But for people who 0:03:29.880 --> 0:03:33.200 are listening and for you the investor at home, when 0:03:33.240 --> 0:03:35.880 you see gold prices mentioned in the press or wherever, 0:03:35.960 --> 0:03:38.640 it's actually US, isn't it. It's the that's the one 0:03:38.640 --> 0:03:39.600 that everyone uses. 0:03:39.840 --> 0:03:42.840 More often than not that that is correct, and you 0:03:42.880 --> 0:03:45.320 know that's why, you know, bullion dealers like us will 0:03:45.400 --> 0:03:49.040 show whilst we transact in Australian dollars with our clients, 0:03:49.560 --> 0:03:52.440 will show the US dollars bot price as a reference point, 0:03:52.440 --> 0:03:55.400 because that's what people are used to seeing or seeing 0:03:55.400 --> 0:03:59.040 on the news. Interestingly, from a portfolio point of view 0:03:59.080 --> 0:04:03.040 or from an investment point of you because the Australian 0:04:03.080 --> 0:04:05.880 dollar is a commodity currency, in part driven by the 0:04:05.880 --> 0:04:07.840 fact that we're such a huge gold mining nation, but 0:04:07.880 --> 0:04:10.880 also you know, iron ore and coal and other things. 0:04:11.440 --> 0:04:15.160 What you tend to find is that gold is potentially 0:04:15.200 --> 0:04:18.120 an even more useful asset for Australian investors than it 0:04:18.200 --> 0:04:21.280 is for people in other countries for the very reason 0:04:21.400 --> 0:04:25.000 that during periods where equity markets are a little bit 0:04:25.040 --> 0:04:28.040 weak and there's more uncertainty in the economy, not only 0:04:28.080 --> 0:04:30.960 does gold in US dollars tend to do well, but 0:04:31.000 --> 0:04:33.360 the Australian dollar often falls, So you sort of get 0:04:33.400 --> 0:04:37.240 this double benefit as an Australian dollar gold investor in 0:04:37.279 --> 0:04:38.880 those times of uncertainty. 0:04:39.000 --> 0:04:41.240 So you know, it doesn't happen all day every day. 0:04:41.279 --> 0:04:44.760 But it's an interesting sort of factoid that helps drive 0:04:44.839 --> 0:04:49.080 Australian investors towards gold, be it in bullion form metfs 0:04:49.200 --> 0:04:51.280 or sometimes through gold miners as well. 0:04:51.680 --> 0:04:54.520 I mean, I played Devil's advocate here. If I didn't 0:04:54.520 --> 0:04:56.440 know anything about gold, well, I'd say, well, you know 0:04:56.520 --> 0:04:58.880 you're from a gold bullying company, you're going to see 0:04:58.920 --> 0:05:01.080 gold is always going to go. But as would you 0:05:01.120 --> 0:05:02.680 say if I said to a really said agent when 0:05:02.680 --> 0:05:04.279 it's a good time to buy property, they've got to 0:05:04.279 --> 0:05:06.960 say They're always got to say. Now, sure, I think 0:05:06.960 --> 0:05:08.640 that's only reasonable to put on the table. 0:05:08.680 --> 0:05:10.920 But for someone who doesn't know anything. 0:05:10.560 --> 0:05:13.520 About gold, what are the key drivers? Okay, but we 0:05:13.640 --> 0:05:16.760 know at the moment there's a driver in particular of 0:05:16.960 --> 0:05:22.160 late being uncertainty because of the tariffs and the whole 0:05:22.240 --> 0:05:27.200 Trump regime over the US markets. But what drives the 0:05:27.279 --> 0:05:30.599 price and what has driven that long period of gains 0:05:30.640 --> 0:05:32.640 that we've seen that you explained at the start of 0:05:32.680 --> 0:05:33.080 the show. 0:05:33.360 --> 0:05:34.640 Yeah, it's a great question. 0:05:34.680 --> 0:05:36.000 So I think, you know, if we go back to 0:05:36.520 --> 0:05:39.039 I suppose economics who are investing one O one, you know, 0:05:39.080 --> 0:05:41.479 what drives the prompts of anything? It's a combination of 0:05:41.520 --> 0:05:45.040 supply demand. So let's quickly address the supply side for 0:05:45.440 --> 0:05:50.680 investors with gold, there is an absolutely mammoth supply of 0:05:50.720 --> 0:05:53.039 gold that already exists in the market, a couple hundred 0:05:53.040 --> 0:05:55.800 thousand tons of gold that have been mined across the 0:05:55.800 --> 0:06:00.000 course of human history and that are still owned by investors. 0:06:00.040 --> 0:06:01.239 Supply is pretty static. 0:06:01.240 --> 0:06:03.440 It grows a little bit every year based on the 0:06:03.480 --> 0:06:06.159 mind output, as it were. When it comes to demand, 0:06:06.200 --> 0:06:09.600 you've really got three let's call it primary buckets of 0:06:10.040 --> 0:06:13.000 buying or of demand. You've got jewelry buyers, which we 0:06:13.040 --> 0:06:15.240 can deal with quickly in the sense that that is 0:06:15.279 --> 0:06:17.920 an important long term part of the gold market. 0:06:17.960 --> 0:06:19.800 People buy jewelry because it looks. 0:06:19.560 --> 0:06:24.239 Beautiful, and gold is obviously a timeless asset, But actually 0:06:24.279 --> 0:06:27.719 there's very little correlation between jewelry demand and movements in 0:06:27.760 --> 0:06:31.839 the goal price. The two other elements one you touched 0:06:31.839 --> 0:06:34.680 on before, it's central bank buying, and then you've got 0:06:34.680 --> 0:06:38.320 private investors. Now why do central banks buy gold. They 0:06:38.320 --> 0:06:42.560 buy for a handful of reasons. First and foremost, because 0:06:43.160 --> 0:06:47.000 the gold market is big enough, it's liquid enough, it's 0:06:47.000 --> 0:06:51.479 of substantial enough size that central banks can play in it. 0:06:51.480 --> 0:06:54.760 So when central banks are investing, they're investing obviously huge 0:06:54.760 --> 0:06:55.880 sums of money. 0:06:55.640 --> 0:06:59.280 Big licks of money. They're not put ten grand worth 0:06:59.279 --> 0:07:00.400 of gold, that's right. 0:07:00.760 --> 0:07:04.000 But also by definition they can't really go and buy 0:07:04.040 --> 0:07:04.760 private equity. 0:07:04.800 --> 0:07:06.560 They're not going to buy small cap stocks. 0:07:06.600 --> 0:07:10.840 Like there's a suite of investments as it were, that 0:07:10.920 --> 0:07:14.640 are just not appropriate due to their size, due to 0:07:14.680 --> 0:07:18.920 their liquidity, due to their risk profile. Gold like the 0:07:19.080 --> 0:07:22.360 US treasury market, like the eurobond market, the Japanese government 0:07:22.400 --> 0:07:25.280 bond market, it's one of the few asset classes that 0:07:25.440 --> 0:07:29.080 is big enough, deep enough and liquid enough that central 0:07:29.080 --> 0:07:31.320 banks can play in the gold market. 0:07:31.320 --> 0:07:33.200 And so they do. And it has this. 0:07:33.160 --> 0:07:37.480 Added advantage obviously, or advantage that is increasingly favorable to 0:07:37.560 --> 0:07:40.720 central banks, that it has no credit risk. Over the 0:07:40.800 --> 0:07:44.120 long run, it has demonstrated that it doesn't really have 0:07:44.200 --> 0:07:47.600 inflation risk as well. It's kept up with or outpaced inflation, 0:07:48.760 --> 0:07:55.040 and I think increasingly importantly now there's this question around ownership, 0:07:56.360 --> 0:08:01.360 which has only been exacerbated since the the invasion of 0:08:01.400 --> 0:08:05.520 the Ukraine by Russia, where Russian central bank assets. 0:08:05.240 --> 0:08:06.680 And the like have been frozen. 0:08:07.240 --> 0:08:08.760 You know, if you own gold and you've got it 0:08:08.800 --> 0:08:11.200 on shore, then really that can't be done. And so 0:08:11.720 --> 0:08:16.000 what we have seen not only since the invasion of Ukraine, 0:08:16.040 --> 0:08:19.560 but really going back to the global financial crisis fifteen 0:08:19.640 --> 0:08:22.920 years ago, is central banks have been buying gold in 0:08:23.040 --> 0:08:26.080 vast quantities every single year, and the speed at which 0:08:26.080 --> 0:08:29.680 they're buying has been accelerating. So that's the central bank 0:08:29.720 --> 0:08:32.800 part of the market. And then the last bit is 0:08:32.840 --> 0:08:36.720 your private investors that are either buying ETFs, are buying coins, 0:08:36.760 --> 0:08:40.199 or are buying bars, and fundamentally they're buying is driven 0:08:40.240 --> 0:08:43.760 by two things. The desire to increase the value of 0:08:43.800 --> 0:08:47.000 their portfolio. And obviously, in periods like what we've seen 0:08:47.040 --> 0:08:50.320 in the last year, gold has been a terrific asset 0:08:50.360 --> 0:08:53.640 from a pure return perspective. But more importantly, and you 0:08:53.679 --> 0:08:56.760 sort of alluded to yourself, gold has always been that 0:08:56.840 --> 0:09:00.760 trusted safe haven asset. So in periods of uncertainty, heightened 0:09:00.800 --> 0:09:04.800 volatility in the share market, you know, question marks over 0:09:05.000 --> 0:09:09.760 the outlook for growth, investors gravitate towards gold as a 0:09:09.800 --> 0:09:12.280 safe haven because they feel comfortable that it will preserve 0:09:12.320 --> 0:09:14.440 their wealth, and that's driven by the fact that it 0:09:14.440 --> 0:09:16.120 has preserved wealth for so long. 0:09:16.240 --> 0:09:18.720 Well when we talked during the week, I went back 0:09:18.720 --> 0:09:22.199 and looked at gold and how it performed, and yes. 0:09:22.080 --> 0:09:25.360 What you see, of course is true through the ages. 0:09:25.840 --> 0:09:28.679 And the last time that was really I'm going to 0:09:28.720 --> 0:09:32.439 exclude COVID, the last time there was really deep uncertainty 0:09:32.480 --> 0:09:36.360 in the market. That is uncertainty about how the markets 0:09:36.440 --> 0:09:40.720 actually work, the order in financial system and how it's 0:09:40.880 --> 0:09:43.320 ordered and how it functions, which is what we have 0:09:43.480 --> 0:09:47.000 now with this issue about the US in particular and 0:09:47.200 --> 0:09:50.480 the US dollar system, which we've known on our lives, etc. 0:09:51.000 --> 0:09:53.079 So there's uncertainty about that. The last time there was 0:09:53.160 --> 0:09:57.000 uncertainty of parallel was the GFC. And yes, gold really 0:09:57.040 --> 0:10:02.400 did lift after the GFC, very substantially. When the fear passed, 0:10:03.800 --> 0:10:08.959 Gold fell by thirty percent roughly in two eleven, at 0:10:08.960 --> 0:10:12.199 which stage most people were pretty convinced it's over. I mean, 0:10:12.200 --> 0:10:14.240 it ended in two or nine, but we weren't to know, 0:10:14.320 --> 0:10:15.880 were we. It took at least a year and a 0:10:15.920 --> 0:10:18.199 half before people said, oh my god, that whole crisis 0:10:18.240 --> 0:10:22.200 is over. So there is that passion that if it 0:10:22.240 --> 0:10:25.360 goes up in times of uncertainty, it does drop in 0:10:25.520 --> 0:10:29.719 times of how we say a peacetime in the markets. 0:10:29.360 --> 0:10:30.400 One hundred percent agree. 0:10:30.480 --> 0:10:33.920 So you know, gold in the short term has similar 0:10:33.960 --> 0:10:37.360 volatility to equities, and so you know it's sort of 0:10:37.400 --> 0:10:40.440 almost only natural that after periods where it's raced ahead 0:10:40.520 --> 0:10:44.120 quite a bit, it's going to consolidate fall back. In 0:10:44.160 --> 0:10:47.880 the case of twenty eleven in US dollar terms, you're right, 0:10:48.280 --> 0:10:51.040 it sort of fell into a cyclical bear market that 0:10:51.160 --> 0:10:54.480 lasted a couple of years before I came onto the 0:10:54.800 --> 0:10:57.680 show today. I actually was looking at some of the 0:10:57.760 --> 0:11:00.760 charts and the tables of returns from back in that era, 0:11:01.280 --> 0:11:03.520 and to put it in, to put it in context. 0:11:04.520 --> 0:11:06.520 You know, if you look at you know, back. 0:11:06.400 --> 0:11:09.880 In two thousand and nine twenty ten, you could buy 0:11:09.920 --> 0:11:12.959 an ounce of gold this is in Australian dollars at 0:11:12.960 --> 0:11:14.760 around fifteen hundred dollars an ounce. 0:11:15.440 --> 0:11:17.439 Now, over the next year or so, you. 0:11:17.480 --> 0:11:20.280 Probably wouldn't have been thrilled with your investment because a 0:11:20.320 --> 0:11:22.560 bit of heat came out of the gold market as 0:11:22.600 --> 0:11:25.319 investors rotated back towards equities. 0:11:25.200 --> 0:11:25.720 And the like. 0:11:26.160 --> 0:11:28.559 But again I'll just use that price point as an anchor, 0:11:28.640 --> 0:11:31.600 around fifteen hundred dollars an ounce back, then the price 0:11:31.679 --> 0:11:33.480 is closer to five thousand today. 0:11:33.920 --> 0:11:37.520 So whilst in the short term, you know, had you bought. 0:11:37.280 --> 0:11:40.839 In during that period of let's call it heightened uncertainty 0:11:41.600 --> 0:11:45.160 and heightened froth in the gold market over the next three, six, 0:11:45.240 --> 0:11:48.120 twelve months, you might have felt great about yourself as 0:11:48.160 --> 0:11:51.200 a long term holding, though you've done pretty well having 0:11:51.200 --> 0:11:54.840 that allocation to gold. So and I think we're probably 0:11:54.880 --> 0:11:56.880 in a similar period now. Bit of froth coming out 0:11:56.920 --> 0:11:59.960 of the market quite a healthy thing, but I believe 0:12:00.120 --> 0:12:03.120 the fundamentals driving gold are still very much in place. 0:12:03.720 --> 0:12:06.680 Okay, what we might do is in the next part 0:12:06.920 --> 0:12:09.920 of the show we should talk about where you think 0:12:09.960 --> 0:12:13.280 gold is going. But also I think the biggest change 0:12:13.800 --> 0:12:18.360 is what in terms of the choices people have, which 0:12:18.360 --> 0:12:20.199 has changed so much. In terms of gold, it was 0:12:20.240 --> 0:12:23.240 a very specialist, refined area once upon a time, refined 0:12:23.520 --> 0:12:27.440 excuse upon Now it's something that you can buy quite easily. 0:12:27.760 --> 0:12:30.280 You can buy a thousand dollars worth of gold, five 0:12:30.360 --> 0:12:33.560 hundred worth if you wish, through exchange traded funds, which 0:12:33.559 --> 0:12:35.280 have really sort of blossomed in the market. 0:12:35.600 --> 0:12:37.280 So we'll talk about that in a moment. We take 0:12:37.320 --> 0:12:37.680 a break. 0:12:45.200 --> 0:12:47.760 Hello and welcome back. To the Australian's money puzzle. I'm 0:12:47.840 --> 0:12:51.440 James Kirby talking to Jordan Elisio, general manager of ABC 0:12:51.640 --> 0:12:56.760 Bullion in Sydney. Mister Gold, Now, mister Gold, tell us 0:12:56.800 --> 0:12:58.960 about the cues that were forming outside your office at 0:12:59.000 --> 0:13:02.720 once day. That's arkable, really, had that ever happened before? 0:13:02.800 --> 0:13:05.199 That happened in April right at the depth of the 0:13:05.480 --> 0:13:07.120 tariff of scare. 0:13:07.600 --> 0:13:11.559 Yes, it has happened before, So it happens. So we've 0:13:11.559 --> 0:13:13.960 been in our global flagship store in Martin Place for 0:13:14.120 --> 0:13:16.160 just over two years now. We opened in March of 0:13:16.160 --> 0:13:19.840 twenty twenty three, and as coincidence, it was almost like 0:13:19.880 --> 0:13:21.760 it was written in the stars. The day that we 0:13:21.840 --> 0:13:26.200 opened in Martin Place was the day that the Australian 0:13:26.240 --> 0:13:30.520 dollar gold price first touched three thousand dollars an ounce, right, 0:13:30.800 --> 0:13:33.679 and there was huge demand for gold back then. 0:13:34.840 --> 0:13:35.920 I think it would still be in a lot of 0:13:35.920 --> 0:13:36.640 people's minds. 0:13:36.640 --> 0:13:40.480 But that was around the period where Silicon Valley Bank 0:13:40.559 --> 0:13:42.520 fell over in the United States. Remember that was always 0:13:43.040 --> 0:13:45.959 almost two years ago to the day, or sorry, two 0:13:46.040 --> 0:13:48.080 years and a month or so, given we're now in mayhere, 0:13:49.000 --> 0:13:51.360 and so what we found then was obviously gold was 0:13:51.400 --> 0:13:55.480 performing quite well, but particularly whenever there's any fears around 0:13:55.520 --> 0:13:58.240 sort of the safety and security of the banking system, 0:13:59.160 --> 0:14:02.440 you see physical gold demands and it wasn't just us 0:14:02.440 --> 0:14:04.840 at ABC Bully and this was a global phenomena at 0:14:04.840 --> 0:14:08.360 the time. Physical gold demands surged in that period. And 0:14:08.400 --> 0:14:11.800 so yeah, we had days where we were having cues 0:14:11.840 --> 0:14:12.160 with a. 0:14:12.120 --> 0:14:13.439 Norm rather than the exception. 0:14:14.280 --> 0:14:19.400 There are also then cultural buying periods, particularly when Dwali 0:14:19.480 --> 0:14:23.120 and Dan Terras for the Indian community ques of people 0:14:23.160 --> 0:14:27.640 down Martin Place buying gold of the norm over that period, right, But. 0:14:27.640 --> 0:14:29.760 Yeah, no, it's not an all day, every day phenomenon. 0:14:29.880 --> 0:14:32.680 Yes, yes, but of what was explort I suppose extraordinary 0:14:32.840 --> 0:14:35.400 was this site of people actually quing for God. The 0:14:35.440 --> 0:14:37.640 last time I saw people cuing for gold. Well, you 0:14:37.640 --> 0:14:39.680 would see the course all the time in Hong Kong 0:14:39.760 --> 0:14:41.560 and I lived there because they used to have gold 0:14:41.600 --> 0:14:43.880 accounts and people used to just use them like current accounts. 0:14:43.880 --> 0:14:48.359 It was amazing. Was that's very much a thing. Similarly, 0:14:48.600 --> 0:14:52.680 I can remember being in Zurich and seeing people sort 0:14:52.720 --> 0:14:55.280 of going in and out of the gold vaart there, 0:14:55.600 --> 0:14:58.080 which you would get under banhaf Strass where all the 0:14:58.080 --> 0:15:00.240 big Swiss banks were famous and all the gold was 0:15:00.280 --> 0:15:00.880 in the basement. 0:15:00.920 --> 0:15:02.640 So this is people's image of gold. 0:15:02.640 --> 0:15:04.840 But it is not much easier to buy gold now 0:15:04.880 --> 0:15:07.640 because you have, apart from the traditional area which you 0:15:07.760 --> 0:15:11.520 represent to some degree the gold bars held in the vold, 0:15:11.600 --> 0:15:16.560 you can buy ETFs, which are similarly they are backed 0:15:16.600 --> 0:15:20.800 by goldy repp, so you're buying a paper certificate over 0:15:21.120 --> 0:15:24.600 an amount of gold. And that actually has been I 0:15:24.680 --> 0:15:27.600 mean ETFs have been growing, but it's really been a 0:15:27.640 --> 0:15:31.960 boom area for the local market and we have seen 0:15:32.000 --> 0:15:36.520 a lot of investors go into gold ETFs. Similarly, gold 0:15:36.560 --> 0:15:41.040 miners so good of course this year, like the entire 0:15:41.080 --> 0:15:43.720 sector is of thirty three percent. Some of the favorites 0:15:43.760 --> 0:15:47.080 in the market, Regius Resources is up about seventy percent, 0:15:47.920 --> 0:15:51.240 Evolution Mining is up. I think it's let me see 0:15:51.440 --> 0:15:55.200 sixty percent. This is so far this year. These are 0:15:55.240 --> 0:15:58.800 remarkable figures. Now the thing is Jordan. Where is it 0:15:58.840 --> 0:15:59.360 going to. 0:15:59.320 --> 0:16:02.960 Go from here? Gold hit a record a few months 0:16:03.040 --> 0:16:07.440 ago at three five was it? What was the record hit? 0:16:07.680 --> 0:16:09.920 Yeah, close to that and in Australian dollar terms that 0:16:09.960 --> 0:16:13.400 went above five four hundred in mid April. Basically so 0:16:13.440 --> 0:16:14.400 about a month ago. 0:16:14.400 --> 0:16:17.120 Which cordcides with the peak fear I suppose to around 0:16:17.160 --> 0:16:19.280 this tariff, I said, scare, but who knows how it's 0:16:19.280 --> 0:16:22.120 going to play out? But tariff incident, yes, okay, and 0:16:22.160 --> 0:16:25.880 then it has retriced a bit since then. What's pushing 0:16:25.880 --> 0:16:28.360 it higher and what's what could be pushing against it 0:16:28.400 --> 0:16:30.160 in the months ahead. 0:16:30.360 --> 0:16:33.960 Let's start with what's pushing against it first and foremost. 0:16:34.480 --> 0:16:37.560 What we're seeing now is really a textbook correction after 0:16:37.680 --> 0:16:42.000 such a period of elevated games. You know, a forty 0:16:42.440 --> 0:16:45.400 annual return for gold is not something that people should 0:16:45.440 --> 0:16:49.320 expect to see repeated year on year. That is an exception, Ferniger. 0:16:49.680 --> 0:16:52.240 You need to see some froth coming out. So you know, 0:16:52.320 --> 0:16:54.880 in US and Aussie dollar terms, it's down roughly ten 0:16:54.920 --> 0:16:59.040 percent from its peak there or thereabouts, which is you know, again, 0:16:59.080 --> 0:17:01.360 whether we're looking at gold, equities, you name it. Those 0:17:01.400 --> 0:17:03.880 are sort of textbook corrections that you see in markets. 0:17:04.320 --> 0:17:08.199 What's pushing against it right now is also, for one 0:17:08.240 --> 0:17:12.479 of a better term, the short term calm that appears 0:17:12.560 --> 0:17:15.119 to be in play regarding tariffs that sort of China 0:17:15.240 --> 0:17:17.600 US sort of appear to have for one of a 0:17:17.600 --> 0:17:20.160 better term, lowered their guns for ninety days, and that's 0:17:20.200 --> 0:17:21.800 given people a little bit of confidence. 0:17:22.240 --> 0:17:23.280 So that's obviously helped. 0:17:23.560 --> 0:17:25.800 I mean, I think the SMP's now almost recovered all 0:17:25.800 --> 0:17:28.919 of its losses, so obviously investors do feel more confident 0:17:29.000 --> 0:17:29.800 going back into. 0:17:29.760 --> 0:17:33.320 Two equities, and that's taking away some of golds. 0:17:34.080 --> 0:17:36.679 Let's call it risk off bid that you'd expect to 0:17:36.680 --> 0:17:39.960 see as people gravitate out of equities into gold. The 0:17:40.000 --> 0:17:43.040 other one, as well, is that markets appear to have 0:17:43.119 --> 0:17:46.720 ever so slightly priced out a couple of rate cuts, 0:17:46.760 --> 0:17:49.680 so everyone still thinks rates are coming down, but maybe 0:17:49.720 --> 0:17:51.600 not as fast as what they thought they would a 0:17:51.600 --> 0:17:52.359 month or so ago. 0:17:52.800 --> 0:17:55.000 So those are the things that are weighing against gold. 0:17:55.280 --> 0:17:57.440 The theory is, and it's it's more than a theory, 0:17:57.480 --> 0:18:01.640 it's a it's a key aspect of gold that as 0:18:01.800 --> 0:18:07.119 rates go down, that's good for gold. Could you explain why. 0:18:07.720 --> 0:18:10.639 Yeah, it's it's probably a fraction more nuanced than that, 0:18:10.640 --> 0:18:12.560 And I can get out that it's not just about 0:18:12.560 --> 0:18:15.520 where interest rates are. It's the interplay between interest rates 0:18:15.560 --> 0:18:18.680 and inflation. So you know, if rates are going up 0:18:18.760 --> 0:18:22.240 but inflation's going up by more, then all other things 0:18:22.280 --> 0:18:24.600 being equal, the money you're earning in a bank account 0:18:24.640 --> 0:18:26.680 is worse off, if that makes sense, right. 0:18:26.720 --> 0:18:28.160 A world of. 0:18:28.160 --> 0:18:32.879 Zero percent interest rates and zero percent inflation is almost 0:18:32.920 --> 0:18:34.959 better for someone with money in a bank account than 0:18:35.000 --> 0:18:38.000 a world of three percent interest rates but five percent inflation, 0:18:38.280 --> 0:18:42.320 if that makes sense. So, but the general rule has 0:18:42.400 --> 0:18:45.680 been that as interest rates in real terms come down, 0:18:46.359 --> 0:18:49.320 gold tends to do better because you've got less of 0:18:49.359 --> 0:18:52.679 an opportunity cost in holding this physical asset that doesn't 0:18:52.720 --> 0:18:55.000 give you an income. So, you know, it sort of 0:18:55.040 --> 0:18:57.800 stands to reason that if I can make five percent 0:18:57.880 --> 0:19:02.120 after inflation putting my money in the bank, then that's 0:19:02.200 --> 0:19:04.639 kind of what I'm giving up by buying gold, Whereas 0:19:04.640 --> 0:19:08.440 if I can only earn one percent after inflation, it's 0:19:08.480 --> 0:19:11.440 not so much to be giving away key. And so 0:19:11.800 --> 0:19:13.680 I think if you look at the outlook for both 0:19:13.800 --> 0:19:18.080 rates and inflation combined, it feels like we're through the worst. Well, 0:19:18.160 --> 0:19:21.320 very clearly, we're through the worst of that inflationary spike 0:19:21.359 --> 0:19:25.200 that we saw after COVID. However, we're now seeing rates 0:19:25.240 --> 0:19:27.719 start to come down and they're likely to go go 0:19:27.800 --> 0:19:30.840 further down, and so investors are starting to think, well, 0:19:31.119 --> 0:19:33.119 hang on, I'm not going to earn much leaving my 0:19:33.160 --> 0:19:35.760 money in a bank account or tying it up in 0:19:35.760 --> 0:19:38.240 its term deposit. I'm better to go and look for 0:19:38.320 --> 0:19:42.200 other investments. And that's not just gold. It's residential real estate, 0:19:42.240 --> 0:19:45.280 it's equities, it's crypto, it's other things as well. But 0:19:45.560 --> 0:19:48.520 gold is one of the assets that's likely to benefit 0:19:48.600 --> 0:19:49.080 from that. 0:19:49.359 --> 0:19:51.119 But the thing about goold, of course, if you go 0:19:51.240 --> 0:19:56.880 to financial advisor and you see I'm convincedchoolers good, I'm 0:19:56.920 --> 0:19:59.439 convincedchoolers on the way up, I'm convinced that gold has 0:19:59.440 --> 0:20:01.119 been good for you and will continue to be. The 0:20:01.400 --> 0:20:04.480 infinancial advisor will say the problem with gold is there's 0:20:04.480 --> 0:20:09.919 no income, and almost every other serious asset class has income. 0:20:10.000 --> 0:20:12.399 And then there's this sort of residual notion that it 0:20:12.440 --> 0:20:15.160 was okay, if you're very wealthy, that you can have 0:20:15.240 --> 0:20:19.440 gold in whatever form you wish, including in bullion, which 0:20:19.440 --> 0:20:23.560 you obviously have and involves, but there's no income, so 0:20:23.640 --> 0:20:26.160 you are totally dependent on the price going up. Finally, 0:20:26.160 --> 0:20:28.320 if you have property, you actually have income. 0:20:28.440 --> 0:20:30.800 Yeah, So I mean, look, that's true. 0:20:31.320 --> 0:20:33.240 The way I would look at it, having been in 0:20:33.320 --> 0:20:35.199 bullion for a long time, but also having worked in 0:20:35.240 --> 0:20:40.159 other markets, the way I look at things is every 0:20:40.160 --> 0:20:43.320 single asset class has at least one drawback, right there 0:20:43.720 --> 0:20:47.240 is you know, if I look at cash, well, cash 0:20:47.359 --> 0:20:51.320 is stable, right, but it offers no potential for capital growth, 0:20:51.760 --> 0:20:54.359 and you are exposed on the inflation front, and you 0:20:54.480 --> 0:20:57.280