Insights

State Street Gold Fund Commentary Q4 2024 Update

In Q4, the Fund returned +11.7% (net), performing above the benchmark of 11.2% . Although the gold price in USD declined 0.38% during the quarter as momentum stalled in November on the back of Donald Trump’s victory in the US election victory, driving a surge in risk assets. The gold price in AUD was aided by the rally in the USD in Q4. Since the Fund’s inception in July 2024, it has returned +19.6%, outperforming the benchmark by 0.4% .

12 January 2025

Robin Tsui, CPA, CAIA, CA

APAC Gold Strategist

Gold Market Review and Outlook

The price of gold in AUD performed strongly in Q4, up 11.3% for the quarter and recorded its fifth consecutive quarterly gains. Gold in AUD continued to hit record highs during the quarter, driven by the strength of the USD - the USD/AUD pair rallied 11.7% in Q4, the largest quarterly gain since Q1 2020. The USD rally was supported by the optimism around the Trump trades and the US Federal Reserve (Fed) indicating in December they now expect two rate cuts in 2025, down from four projected cuts in September. Moreover, led by escalating geopolitical tensions, the gold market has seen resilient investment and central bank demand throughout the year and gold in AUD ended 2024 with an annual return of 40.0%, closing at A$4,241/oz, outperforming all major asset classes.

Robust central bank gold purchases, led by emerging markets central banks such as Turkey, India, Poland and China, continued to support gold’s price floor in Q4, with net gold buying on track for another strong year in 2024. Global gold-backed ETFs posted net inflows of US$3.0 billion in Q4, down from net inflows of US$7.1 billion in the previous quarter, driven by investors becoming more risk-on after Trump’s presidential victory. Yet, APAC listed gold-backed ETFs registered a record net inflows of US$2.7 billion in Q4, with investors in the APAC region turning to the yellow metal to hedge against economic uncertainty, geopolitical risks and local currency weakness. In Australia, despite the Reserve Bank of Australia holding its cash rate steady at 4.4%, other major central banks such as the Fed maintained its current monetary stance to cut interest rates in Q4, and lowered the opportunity cost of holding gold for global investors.

Our base case for 2025 is for gold to range between US$2,600/oz and US$2,900/oz. Despite gold’s strong run in 2024, ongoing geopolitical tensions, growing consumer and investment demand for gold, and robust central bank purchases should remain the key drivers supporting gold prices in 2025. We expect the secular demand trends underpinning gold’s price and its status as a safe haven to continue enhancing gold’s appeal as a core portfolio asset, even if capital markets strike a risk-on tone in 2025.

Disclosure

Issued by State Street Global Advisors, Australia Services Limited (AFSL Number 74900, ABN 16 108 671 441) (“SSGA, ASL”). Registered office: Level 14, 420 George Street, Sydney, NSW 2000, Australia. T: 612 9240 7600. State Street Global Advisors, Australia, Limited (AFSL Number 238276, ABN 42 003 914 225) (“SSGA Australia”) is the Investment Manager.

References to the State Street Gold Fund ("the Fund") in this communication are references to the managed investment scheme domiciled in Australia, promoted by SSGA Australia, in respect of which SSGA, ASL is the Responsible Entity. This general information has been prepared without taking into account your individual objectives, financial situation or needs and you should consider whether it is appropriate for you. You should seek professional advice and consider the product disclosure statement, available at www.ssga.com, before deciding whether to acquire or continue to hold units in the Funds. The Target Market Determination is also available at ssga.com., before deciding whether to acquire or continue to hold units in the Fund. The Target Market Determination is also available at ssga.com.

Investing involves risk including the risk of loss of principal. Diversification does not ensure a profit or guarantee against loss. Investing in commodities entail significant risk and is not appropriate for all investors. There are risks associated with investing in Real Assets and the Real Assets sector, including real estate, precious metals and natural resources. Investments can be significantly affected by events relating to these industries.

THE LBMA GOLD PRICE, WHICH IS ADMINISTERED AND PUBLISHED BY ICE BENCHMARK ADMINISTRATION LIMITED (IBA), SERVES AS, OR AS PART OF, AN INPUT OR UNDERLYING REFERENCE FOR THE STATE STREET GOLD FUND.

LBMA GOLD PRICE IS A TRADE MARK OF PRECIOUS METALS PRICES LIMITED, AND IS LICENSED TO IBA AS THE ADMINISTRATOR OF THE LBMA GOLD PRICE. ICE BENCHMARK ADMINSTRATION IS A TRADE MARK OF IBA AND/OR ITS AFFILIATES. THE LBMA GOLD PRICE PM, AND THE TRADE MARKS LBMA GOLD PRICE AND ICE BENCHMARK ADMINISTRATION, ARE USED BY STATE STREET GLOBAL ADVISORS WITH PERMISSION UNDER LICENCE BY IBA.

IBA AND ITS AFFILIATES MAKE NO CLAIM, PREDICATION, WARRANTY OR REPRESENTATION WHATSOEVER, EXPRESS OR IMPLIED, AS TO THE RESULTS TO BE OBTAINED FROM ANY USE OF THE LBMA GOLD PRICE, OR THE APPROPRIATENESS OR SUITABILITY OF THE LBMA GOLD PRICE FOR ANY PARTICULAR PURPOSE TO WHICH IT MIGHT BE PUT, INCLUDING WITH RESPECT TO THE STATE STREET GOLD FUND. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL IMPLIED TERMS, CONDITIONS AND WARRANTIES, INCLUDING, WITHOUT LIMITATION, AS TO QUALITY, MERCHANTABILITY, FITNESS FOR PURPOSE, TITLE OR NON-INFRINGEMENT, IN RELATION TO THE LBMA GOLD PRICE, ARE HEREBY EXCLUDED AND NONE OF IBA OR ANY OF ITS AFFILIATES WILL BE LIABLE IN CONTRACT OR TORT (INCLUDING NEGLIGENCE), FOR BREACH OF STATUTORY DUTY OR NUISANCE, FOR MISREPRESENTATION, OR UNDER ANTITRUST LAWS OR OTHERWISE, IN RESPECT OF ANY INACCURACIES, ERRORS, OMISSIONS, DELAYS, FAILURES, CESSATIONS OR CHANGES (MATERIAL OR OTHERWISE) IN THE LBMA GOLD PRICE, OR FOR ANY DAMAGE, EXPENSE OR OTHER LOSS (WHETHER DIRECT OR INDIRECT) YOU MAY SUFFER ARISING OUT OF OR IN CONNECTION WITH THE LBMA GOLD PRICE OR ANY RELIANCE YOU MAY PLACE UPON IT.

This material should not be considered a solicitation to apply for interests in the Fund and investors should obtain independent financial and other professional advice before making investment decisions. There is no representation or warranty as to the current or accuracy of, nor liability for, decisions based on such information.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA Australia’s express written consent.

More on Gold

View All Gold Insights