POWERED BY MOMENTUM MEDIA
Strong correlation between AUD and gold prices
A historical relationship exists between the price of gold bullion and the Australian dollar, which many investors did not realise despite the unprecedented levels of gold demand, according to BetaShares.
BetaShares head of investment strategy and distribution, Drew Corbett, said that the rise of the Australian dollar has eliminated much of the benefit of the rising value of gold (which is priced in US dollars) with this strong correlation impacting unhedged gold exposures.
“By analysing the movements in the gold spot price and the AUD/USD exchange rate we have found that, generally speaking, over the last three decades, when the price of gold bullion has risen so too has the Australian dollar relative to the US dollar,” Corbett said.
“Gold is widely regarded as a currency in its own right and thus, during times of US dollar weakness, gold often increases in value as many investors choose to own gold rather than US dollars,” he said.
Similarly, the Australian dollar was also likely to strengthen during times of US dollar weakness, according to Corbett.
“Australia’s role as a major producer of gold and other commodities means the Australian dollar is seen globally as a ‘commodity currency’”.
BetaShares analysis had also found that while spot gold prices surged 74 per cent in the period from December 2008 through to end of May 2011, unhedged spot gold returned only 14 per cent.
Recommended for you
Governor Bullock took a more hawkish stance on Tuesday, raising concerns over Trump’s escalating tariffs, which sent economists in different directions with their predictions.
Equity Trustees has announced the appointment of Jocelyn Furlan to the Superannuation Limited (ETSL) and HTFS Nominees Pty Ltd (HTFS) boards, which have oversight of one of the companies’ fastest growing trustee services.
Following growing criticism of the superannuation industry’s influence on capital markets and its increasing exposure to private assets, as well as regulators’ concerns about potential risks to financial stability, ASFA has released new research pushing back on these narratives.
A US-based infrastructure specialist has welcomed the $93 billion fund as a cornerstone investor.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Global X GlobalX FANG+ ETF
33.51 3 y p.a(%)
2
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.62 3 y p.a(%)
4
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
