Gold climbed past $3,775 an ounce this week, up more than 44 per cent year-to-date, as Australian investors poured $59 million into gold exchange-traded funds (ETF) in September alone.
While February was the biggest month so far – accruing $74 million amid early-term worries regarding President Donald Trump’s tariff announcements – September is already on track to surpass it, according to Betashares data.
Once viewed as a niche hedge, the precious metal is now moving centre stage, with global institutions such as Morgan Stanley recommending portfolio allocations of up to 20 per cent.
As Betashares chief economist David Bassanese explained, several demand factors are supporting the continued upward trend in gold prices.
“Central bank buying to diversify their foreign reserves away from the US dollar and US Treasury bonds has been an important source of demand in recent years. Jewellery-related demand in emerging markets, especially India and China, has also been a factor,” he said.
While Bassanese acknowledged that both central bank buying and jewellery-related demand have moderated this year, he said both demand drivers ultimately remain firm.
Meanwhile, he said that investor demand has “ratcheted higher”, particularly given that a weaker US dollar inadvertently cheapens the cost of gold in foreign currencies.
Additionally, he pointed to growing safe-haven demand, attributing it to elevated global economic uncertainty following US President Trump’s return to power and ongoing conflicts in the Middle East and Europe.
However, the bullish case on gold is not a unanimous take, with chief investment officer at ETF Shares, David Tuckwell, recently pointing out that a weaker US dollar isn’t always a win for Australian gold punters.
Taking to his LinkedIn last month, Tuckwell wrote: “A weaker greenback can propel the gold price higher in US dollar terms, but it also tends to lift the Australian dollar. And the gold price, officially quoted in US dollars, translates back into fewer Aussie dollars.”
For his part, he has continuously advised selling over buying at this time. But inflows are continuing to soar.
According to Betashares data, nearly $400 million has flowed into Australian gold ETFs so far this year, with Betashares Gold Bullion - Currency Hedged ETF (ASX: QAU) capturing over half.
In the case of bullion products, ABC Bullion said it is also experiencing unprecedented demand – with record client growth and thousands of new accounts opening each week.
The precious metal dealer attributes this growth primarily to the introduction of new, accessible products. These include the ABC Bullion Gold Saver, which enables Australians to begin accumulating gold holdings with an initial investment of $50 per month, and the ABC Bullion Gold Decumulation Plan, which is designed to provide regular cash flow.
According to ABC Bullion, both products aim to open gold to a wider range of people, from first-time buyers and younger savers to SMSF trustees as well as retirees.
Jordan Eliseo, general manager of ABC Bullion, argued that the momentum surrounding gold indicates a “strategic rebalancing” of the precious metal’s role in portfolios. He emphasised gold’s growing appeal to all ages and income brackets.
“With interest rate cuts fuelling demand, the surge in client growth reflects the way Australians are embracing gold across every stage of their financial journey,” he said.
Looking forward, Bassanese predicted continued strength in gold prices and weakness in the US dollar due to anticipated further rate cuts by the Fed, contrasting with steady rates in Europe and Japan.
“In terms of price targets, the next major milestone will likely be US$4,000 an ounce, which on current trends could be easily achieved by year-end,” he added.
