Add Category
A modern-day gold rush has moved up a gear with the price of the precious metal breaking records on an almost-weekly basis.
Bulk gold — or bullion — surged above $US2,700 per ounce last week for the first time, extending its gain this year to 31 per cent.
"It is a bit nuts, I have to say," Marcus Today senior markets analyst Henry Jennings said.
"It's certainly been one of the best performing assets this year by a long shot."
The precious metal hit a record $4,000 per ounce last week, which is up by a third so far this year.
There's a number of factors behind the recent gold rush — the geopolitical events in the middle east, for one.
Central banks are continuing to accumulate gold, but buying has slowed after "record breaking" demand at the start of the year, according to the World Gold Council.
Global investors also appear to be hoarding the commodity ahead of the US election early next month.
"There is also a fear of what's going to happen … neither candidate has really addressed the growing US deficit: $US32 to $US33 trillion and counting," Mr Jennings noted.
"Gold is being seen as one of those safe havens at the moment.
"It's been extraordinary — very bullish."
What he means by "bullish" is that many investors are enthusiastically buying in the market.
But could that be because there's a feeling that global financial markets, including share markets, have gotten ahead of themselves?
Deputy governor of the Reserve Bank, Andrew Hauser, says he thinks maybe they have.
"Global financial markets are being spectacularly optimistic, particularly in the equity market, about the probability of a soft [economic] landing, really throughout the post-COVID period," he told a Commonwealth Bank investor briefing on Monday.
The deputy governor even provided his personal assessment of the enthusiasm in global financial markets.
"Certainly my personal view is that the outlook that's been embodied in some of those assets has been primed for perfection.
"It might well be true, it might well still turn out to be true, but it's at one end of the distribution," Mr Hauser said.
But Mr Jennings believes Wall Street, at least, is betting on a Donald Trump victory in the upcoming US election, which is perceived to be a positive for the world's biggest economy.
"It's such a strong economy, and we have seen that time and time again in the past few weeks with economic data."
That leaves something of a financial market paradox — a soaring gold price, which some view as an indication investors are preparing for a so-called hard landing or a global recession, alongside the idea that the world's biggest economy will continue to perform well.
"Inevitably with [financial] markets, they don't go up in straight lines forever," Mr Jennings said.
"Just when everyone gets fixated on a particular view, then that does tend to come undone."
But which view is likely to come undone remains up for debate.
In the case of the risks around the US election, we'll know if they are realised in the next fortnight.
In the meantime, IG London's chief market analyst Chris Beauchamp thinks the gold rush "shows no sign of slowing".
"The recent dip in early October worked out well for the bulls who have seen a fresh leg higher in this strong trend," he wrote in a note.
He did express some caution though.
"A close below $US2,685, the September high, might trigger some short-term weakness."
The price of silver is also proving strong, rising more than 30 per cent this year.
It's now trading at its highest level since 2012.