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Gold’s rise goes beyond a demand story, according to ANZ Chief Economist Richard Yetsenga, and could reflect levels of confidence in the global economy.
Speaking to ANZ Institutional Insights on video, Yetsenga said the spike in demand — which has extended to the retail market in some regions — spoke to issues beyond the market, including debt in some key western markets.
“I think gold is telling us that there are some structural drivers in the global economy which enough savers are concerned about,” he said.
“And I use the term savers because this is broader than just an investment story.”
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Earlier in October, the price of gold rose to more than $US4,000 an ounce, driven by broad macroeconomic uncertainty.
“A year ago, it was at $US2,500,” Yetsenga said. “When you look at the scale of that price change, it dwarfs anything we've seen in history.
“So gold is telling us there are some underlying issues in the global economy which are unresolved — and they're probably related to debt levels in places like the US, the UK and France.”
ANZ Research has suggested the “structural drivers for gold are likely to remain in place”.
“In addition to macroeconomic factors, the US government shutdown is shaking investor confidence,” a recent Australian Morning Focus report read.
The ongoing shutdown is expected to impact the publication of the next US Bureau of Labor Statistics inflation report, which would make it the latest official data release to be delayed.
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