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The recent political turmoil in Australia was a causative factor in making investors jittery all across not just the stock but also the commodities market. And gold prices were certainly no exception to the rule. However, once the dark clouds of political uncertainty disappeared, so too did various commodities and precious metals prices register a certain measure of consistency in terms of day to day trade.

How have gold prices in Australia been affected by the change in Prime Minister?

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As a matter of fact, gold had slipped to a fresh weekly-low in the first week of this month ($1,190). However, this did not come as a surprise as the ISM Manufacturing survey had quite unexpectedly climbed straight up 58.5% last month, and ended up pretty much marking its very highest reading ever in the last 14 years or so. However, the recent price action (and according to many pundits in the gold bullion industry price, ‘correction’) had effectively raised the risk for a considerably further and steep decline in the prices of this metal.

The rebound from the precious metal’s lowest price as of this year ($1,160) has slowly but surely unravelled as an increasingly bullish business sentiment has in its turn, sparked an equally bullish reaction as far as the price of the U.S. dollar is concerned. This is due to the fact that cagy investors have stopped hedging their bets and are now preferring the dollar as an ideal investment, at least for the foreseeable future. And is a great site where you can log on and check online bullion prices as and when required.

Here, the inverse relationship between the greenback and gold may potentially continue to emerge over at least the short term due to the fact that the data streams emanating from the US economy have been pivotal in encouraging the US Federal Reserve to go ahead and further normalize its overall monetary policy as well.

This has had a direct impact on global currency markets, and by extension on the commodities and precious metals market. Australia has also been similarly affected since the investors here have followed suit to a certain extent.

Where will gold prices go?

However, it is pertinent to note that the broader outlook for spot gold remains more or less tilted to the downside especially as many reports showcase the fact that overall retail sentiment is still near its extreme points.

 Then there is the fact that fairly simple supply and demand economics are also able to influence the physical price of gold in Australia to a fairly significant degree and this will remain a constant, regardless of any monetary or fiscal policies as adopted by the Scott Morrison govt.  

The price will fluctuate in accordance with the demand. And higher demands and lesser supplies will automatically lead to an increase in price. Conversely, should supply increase, while demand remains stagnant, it is an axiomatic assumption that prices will take a nose dive (depending on the level of increased supply).

Harris Q

Harris is a freelance writer who loves to write about finance, business, and IT related subject matter. When he's not in front of his workstation he can be found cycling, running, or hiking!

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