He said another factor was crypto company Tether reportedly buying one to two tonnes of gold a week.
At today’s price, that would be US$172 million to US$344m a week.
The Los Angeles Times reported Tether was hauling a tonne of gold a week into a high-security Swiss bunker for its reserves and as backing for its own gold stablecoin.
Goodson said it was a remarkable event, considering Britain left the gold standard in the 1930s and United States President Richard Nixon ended convertibility of the US dollar to gold in the 1970s.
“Currency’s come full circle.”
The democratisation of trading, epitomised by the rise of platforms such as Sharesies, was cited as another factor.
Goodson mentioned exchange-traded funds (ETFs), which let investors gain from a gold price bump without needing physical bullion like that stashed in Tether’s Swiss bunker.
Goodson said there’d also been a recent “explosion” of supply, including from new mining operations in Australia.
There was also always the secondary supply source, such as from individuals taking unwanted jewellery to the local dealer.
Enthusiasm for gold had spilled over into silver, he said.
Silver was at US$114.71 ($189.67) an ounce this afternoon, up from barely US$70 a month ago and more than three times what it was a year ago.
These commodity markets were “utterly swamped by retail speculation and demand,” Goodson said.
“The other thing that’s really amusing is it’s spilled over into copper markets.”
Bloomberg today described “China’s Metals Mania”, and Goodson said he’d seen reports of Chinese people queuing to buy bricks of the metal.
He said the debasement of fiat currency was one reason for gold’s surging value.
“Clearly the US is following a weak US dollar policy.”
The Wall Street Journal said US President Donald Trump viewed a strong dollar as incompatible with his priorities of faster growth, strong US manufacturing and a smaller trade deficit.
It also said escalating US-Iran tensions were influencing the gold price, with the US moving more firepower into the Middle East.
“Another aspect to it is, normally over the very long-term the relationship to the gold price has been real interest rates,” Goodson said.
“Gold pays no yield. Normally, when real interest rates are quite high, which they are at the moment, normally that’s bad for the gold price.”
But with all those other factors influencing the price, that was not currently the case.
Matt Goodson says retail enthusiasm for gold has spilled over into silver. Photo / Dean Purcell
And he said there was no doubt people’s fear of missing out was a factor in the gold price surge.
Goodson said the market was typified now by “booming retail interest and the signs of a classic bubble”.
He said it was anybody’s guess if we were early or late in the bubble life cycle.
“It’s simply impossible to say whether we’ve seen the peak.”
John Weekes is a business journalist covering aviation and courts. He has previously covered consumer affairs, crime, politics and courts.
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