Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he's one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written, yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - author of Things That Make You Go Hmmm, one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, 'MacroBusiness'.

Monday, 4 July 2016

Precious metals are BACK

Aussie gold medal

I must confess I know very little about gold, although I did work in the resources industry for some time, including for a company which mined copper/silver/gold deposits. 

From discussions with my ol' mate Jordan Eliseo at ABC Bullion I understand that the total supply of demand is relatively fixed.

Logically, therefore, he explained to me (probably several times) sentiment and demand are the true drivers of prices - and such demand can rise at times of uncertainty.

Of course, there has been a fair share of that uncertainty around recently!

The gold price has surged of late to above US$1,340/oz.

This is well down from the 2011 peak of above $1,900/oz - so why the excitement?

Locally at least, the main reason is that when priced in Aussie dollar terms, the weakening of our currency has seen the gold price bolt to all-time highs!

The below chart is plotted on a monthly average basis, but we can expect to see further gains in the month ahead.

As a point of interest I also indexed the gold price against a number of key currencies back to 1969.

If my chart is correct - by no means a given due to my lack of knowledge in this area! - it shows that gold has been an excellent hedge against inflation in countries such as England, where there have been some periods of rampant inflation. 

The same has been true in the United States, which has run up large government debts and experienced prolonged periods of inflation.

There has also been a big resurgence in the price of silver lately, passing its $21 threshold for the first time since July 2014 after a protracted lull. 

The precious metals are back!

Whether or not you hold precious metals in your portfolio, this is excellent news for Australia's trade balance, which is due to be reported later in the week.

In fact, gold is Australia's fifth most valuable export commodity, while there have also been sizable gains across a number of other commodities markets, as traders anticipate further stimulus.