It’s gold rush time but no one’s packing it in, buying picks and shovels and heading for the goldfields, like they did in the 1800s in the USA and here in Bendigo, Ballarat and Bathurst, hoping to call out: “Eureka!” No, the gold chasers are in places like Martin Place Sydney where investors, speculators and scaredy cats are lining up outside the likes of ABC Bullion to add a bit of ‘secure’ glitter to their portfolio of assets.

Numbers-wise, gold was US$3,895 an ounce, which is record high territory. It’s up 44% in a year! And Tom Richardson from thenightly.com.au reports that the precious metal is now our third most valuable export. This is the biggest annual gain since 1979, which means it will help Treasurer Jim Chalmers to keep the budget deficit down, as mining exports like iron ore and now gold ultimately bring in unexpected tax revenue when their prices surge.

This chart below shows how the gold price has surged.

And it’s all understandable with the following happening:

1. An unusual US President who comes up with outside the square ideas like tariffs and his own rival for X (Twitter) called Truth Social. Then there’s immigration programs and a lot more than can unsettle financial markets.
2. The shutdown of the US government with 740,000 employees on furlough, which can slow down the growth of the US economy.
3. A war between Russia and Ukraine, with some action creeping into Poland.
4. Gaza, a peace deal and an Israel more aggressive than ever before.
5. Central banks are buying gold as Trump, the surging US stock market driven by AI and other factors make the US dollar look less stable for conservative central bankers. In the past three years, central banks have bought 1,000 tonnes of gold, which is huge, given the 400-500 tonnes they bought over the preceding 10 years!
6. High inflation always helps gold prices spike, which was the key issue from 2022 and 2024.
7. The Trump administration wants and is getting a lower US dollar to stimulate growth and help reduce its budget deficit.
8. A US stock market at all-time highs eventually will sell-off or crash, and gold is a safe haven play.
9. Term deposit rates are falling and are now less attractive for investors wanting safety or defensive assets.
10. China and other Asian economies are growing wealthier. These cultures simply love gold!

Jordan Eliseo, general manager at ABC Bullion, told Richardson that “2025’s buying frenzy has turned even hotter over the last month as lunchtime line-ups grow longer, [and] in total, Mr Eliseo estimated customer demand for storage in September had almost tripled on the past 12 months’ rolling average.”

Yep, you can buy and get it stored at places like ABC Bullion. And this comes at a time when well-known US fund managers, such as Bridgewater Associates founder Ray Dalio, say the times are like the 1970s. Dalio thinks portfolios could easily have 15% exposure to gold! That looks over-the-top! You can bet Ray’s funds hold gold, so his endorsement has to be treated with a degree of conservatism, but I must confess as a defensive asset gold is looking more appealing as interest rates fall.

That said, I hate buying any assets at all-time highs because you fear that the market corrects just as you get in. On the other hand, I can’t see many of the 10 issues driving gold prices change all that much to send gold prices plummeting.

For my financial planning clients, I’ve put them into ETFs that hold great gold miners such as Northern Star and Evolution Mining, which give them exposure to the rising price of gold.

I prefer diversified plays. Something like EX20 is up over 15% year-to-date, while funds like WQG are up 20.94% over the year! Meanwhile, Vinva Australian Equity Fund was up close to 30% over the past year and is up 15.98% since inception.

Other funds have also competed well against gold and gold companies, so I wouldn’t get too over-the-top mad on the gold bar. I reckon a 5% holding is a great idea, but I would’ve preferred to run this story when the old price was a lot lower. Why? Well, I can never easily forget the advice of that great investor, Warren Buffett who once advised us: “Be fearful when others are greedy. Be greedy when others are fearful.”