Overnight the US markets soared off the back of positive US/China trade talks. Trump indicated that he may talk with President Xi Jinping this week. At this point it appears tariffs on Chinese imports to the US will land at 15%. It certainly would be good news for a number of US businesses and individuals and certainly is a relief from ~150%.
Saying that, if you wound the clock back a few months before all this began and told the average US business and consumer they’d have to pay 15% more for everything they’d seriously have the shits. But today, it sparks a relief rally. That’s the art of the deal.
- S&P 500 = +3.26%
- Nasdaq = +4.35%
- Aussie dollar down 0.9% to 63.57US cents
- Iron up 3.2% to $100.00 US a tonne
Golden era
Today I’ll be recording a few episodes for the Australian Investors Podcast. Two of those episodes will be with investors in real assets, one will focus on global listed infrastructure with the team at Resolution Capital and in the other I’ll be talking gold with Jordan Eliseo from ABC Bullion.
I know dropping gold from the Rask Invest portfolios prior to launch has been one of Owen’s great regrets. Since then, in the last twelve months gold ETFs such as the Global X Physical Gold Structured ETF (ASX:GOLD) has risen an astonishing 42%. Currently gold is trading close to all time highs. Currently it sits at $3,241 US an ounce.
When you hear figures like that the usual question is, can it continue? The answer, most experts suggest, is most likely yes.
The reason for this? Gold thrives on uncertainty…that’s a polite way of saying when the world is burning gold wins.
Misery loves company
Currently we have all of the ingredients for gold to continue to thrive:
- Multiple wars
- Geo-political conflict/tension
- Inflation lingering
- US recession lingering
- Economic nationalism
- Central bank purchasing
Two months ago, Owen recorded this episode with Marc Jocum from Global X. The only thing that’s changed since is another conflict kicking off between neighbours, India and Pakistan.
On the list of above issues, quite a few of those take significant time to de-escalate. And if the negotiating tactics of the leader of the free world are anything to go buy, we could see fears spike again and again over the next three and a half years.
Gold, the pessimists asset.
You can’t make this stuff up
Finally, just as I was about to click publish I see something I can’t pass up. Billy Evans, partner of Elizabeth Holmes – yes fraudulent blood testing Netflix miniseries Elizabeth Holmes – has raised millions of dollars for…wait for it…a blood testing start up. Maybe he’s just keen for a sequel.
Enjoy the rally, especially those Global X Fang+ ETF (ASX:FANG) holders and if you want to get in touch with me please use the chat in the bottom right, jump across to Rask Invest or find me in the Community.
