The government and ASIC are demanding banks and financial service providers strengthen their scam and fraud defences. With this nefarious activity costing Australians $318 million in the past 15 months alone, the industry’s positive response has not come quickly enough.
With industry funds feeling the heat from APRA, it’s likely more members will look for a better option, especially if they are nearing or in retirement. Those choosing to do so need to tread warily.
Trump, central banks lighting a fuse under the gold bugs
It’s a literal gold rush and self-funded retirees are increasingly factoring it into their investment thinking. While physical gold has never found favour with this cohort – the asset does not even register on the ATO’s SMSF statistics – it’s finding its way into their portfolios via ETFs and gold stocks.
There’s no better evidence of this demand than Global X’s physical gold ETFs which recorded $42.5 million in inflows in January, their strongest-ever start to a year. The last time investors piled into gold at the beginning of the year in this fashion was in 2021, when they bought $31.5 million in gold ETFs to hedge market volatility, increasing fears of inflation and monetary policy concerns.
That gold is on their radar is no surprise. In 2024, this precious metal reached 40 new record highs, closing on 31 December at $US2623.10 ($AU4181) an ounce, a bull run that has continued apace in the first six weeks of the year, closing at $US2897 ($AU4602) on Tuesday (US time).
It means the gold price appreciated 28 per cent in 2024 in US dollars (39 per cent in AU dollars), with market analysts arguing that the factors that drove the price last year will continue to prevail.
The World Gold Council stated in its 2024 Annual Review that central banks and investors were driving demand – for the third successive year central bank buying exceeded 1,000 tonnes – and expects this trend to continue in 2025.
“We see tailwinds for gold ETFs, over-the-counter trading and futures-based investment stemming from generally lower interest rates, richly valued equities, a softer US dollar and geopolitical risk mostly expressed though trade and economic uncertainty,” the report says.
“We expect the trajectory for rates in the US will be down but bumpy, given the Trump administration’s all-out pro-growth agenda stoking temporary inflationary fires in a late business cycle. This uncertainty is likely to keep term premia intact and the bond-equity correlation elevated – a positive for gold.”
There is almost total unanimity of opinion among gold analysts that the “Trump factor” – and the geopolitical tensions it’s fomenting – is playing a critical role in underpinning the gold price.
“The current gold rally is driven by elevated levels of buying bullion by central banks, including the People’s Bank of China buying a record amount in 2024, economic uncertainty, interest rate cuts, geopolitical tensions, Trump taking office and elevated valuations on markets driving investor demand for gold due to its safe-haven nature,” Grady Wulff, a market analyst at Bell Direct, tells The Golden Times.
She argues that the gold price still has further to run despite its recent strength. The above factors and under-supply of high-grade gold globally compared with demand will drive the investment tailwinds for this precious commodity.
It’s a view shared by Global X ETF’s investment analyst Justin Lin who sees fresh records for gold over $US3,000 ($AU4,782) an ounce as gold ETF demand soars with investors buying up gold like never before as Trump’s tariffs unsettle markets.
“After selling down the metal in November and December, investors worldwide, including in Australia, returned to being net buyers of gold this January, driving it to new all-time highs of US$2,815 ($AU4,487).
“Consensus estimates place gold at $US2,700 ($AU4,304) by the end of the 2025, but given the momentum and the current environment, we think gold could rise much higher,” he says. “A decisive breakout above $US2,800 ($AU4,463) in the coming months would reinforce the bullish trend, potentially setting up the way to reach $US3,000 ($AU4,782) by as soon as the third quarter of 2025.”
Wulff cautions that there are potential downsides to a high gold price, including a strong US dollar, falling inflation, easing geopolitical tensions and investors shifting out of safe haven investments and into growth areas of the market.
For those self-funded retirees that are attracted to the gold story, she says ETFs such as the Vaneck Gold Bullion ETF (ASX:NUGG), the Global X Physical Gold (ASX: GOLD) or the Ishares Physical Gold ETF (ASX:GLDN) offer great exposure without the risk associated with holding physical gold (security) or equities (exposed to market and investor sentiment volatility).
“Another way to gain exposure is to invest in a producing gold miner such as Northern Star Resources (ASX:NST) – a leading producer with a proven track record of high-grade gold production. Gold Road Resources (ASX:GOR), a high-grade producer selling into an elevated spot price market and gliding towards 350,00 ounces of production in 2025, is also worth a look. For those with a more speculative bent, Spartan Resources (ASX:SPR) could be on their list.”
