Gold blasts through US$5,100 an ounce. Silver vaults over US$100 an ounce. The USD keeps dropping, as investors look for safe havens elsewhere, including in the Aussie dollar, which surged to a three-year high overnight of 69.40 USc.
In our Deep-Dive interview, ANZ Group Chief Economist Richard Yetsenga says the Fed’s cutting track means it’s diverging from other central banks that are likely to hike next, including Australia and New Zealand.
5 things to know in 5 minutes:
Investors globally are looking for safe havens outside of the United States, including in precious metals and other currencies. Gold blasted to another record high overnight of US$5,145 an ounce. Silver rose 12% at US$113.15 an ounce, thanks to investor demand, says ANZ Commodity Strategist Soni Kumari.
Soni says gold may be trading above its fair value levels, but it could go higher still.
She says silver’s outperformance of gold may continue in the short term, but longer term she expects the less shiny metal to underperform.
The yen has strengthened dramatically in recent days, particularly after signs the Bank of Japan and the Fed were preparing to intervene to stop its fall. However, other currencies in Asia are doing better, says ANZ Head of Asia Research Khoon Goh.
New Zealand inflation figures on Friday were stronger than expected, prompting ANZ Research to change its call for the first hike by the Reserve Bank of New Zealand to December of this year, rather than February of next year, says ANZ New Zealand chief economist Sharon Zollner.
Cheers,
Bernard.
Catch you tomorrow with a preview of December quarter inflation data in Australia.
