Gold does what it’s supposed to do

The yellow metal has served as an insurance for Australian investors during this correction.

Summary: Over the past three weeks, the Australian stock market has fallen around 12 per cent, but the gold price has risen 6.1 per cent in Australian dollar terms. Since I bought a one ounce bar of gold at the Perth Mint in early January, I am almost exactly square – which is better than losing money! The outlook for gold today remains largely unchanged despite concern that a US rate rise could put downward pressure on the gold price and upward pressure on the US dollar.

Key take-out: Gold is an insurance policy against changing market conditions which, in Australia’s case, seem to be a slide for the local dollar and perhaps a higher US dollar gold price.

Key beneficiaries: General investors. Category: Gold.

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