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        State Street Gold Fund Commentary Q3 2024 Update

        The Fund returned +7.11% (net) since its inception on 10 July 2024, performing slightly below the benchmark of +7.21%1. Rising gold price in AUD supported by the surge in the spot price of gold in USD, led by a global stock-sell off in July and the US Federal Reserve’s larger-than-expected rate cuts in September, have contributed to the strong performance of the fund.

        Robin Tsui, CPA, CAIA, CA
        APAC Gold Strategist

        Gold Market Review

        Gold Price in AUD performed strongly in Q3, up 9.2% for the quarter and recorded its fourth consecutive quarterly gains. Gold continued to hit record highs in Q3, predominantly led by a 7.2% increase in gold price during the month of July - a global stock sell-off and rising market volatility in July increased investor appetite in gold. The yellow metal ended Q3 at A$3,811/oz, and has risen 25.8% so far in 2024, outperforming some of the major asset classes year-to-date.2

        The global gold market saw rising investment demand in Q3 driven by the escalating geopolitical tensions in the Middle East and as major central banks including the European Central Bank (ECB) and the US Federal Reserve (Fed) began to lower interest rates. The ECB cut its benchmark rate by 25bps to 3.50% in September, the bank’s second rate cut since June in respond to a drop in inflation and increasing signs of weakness in the eurozone economy. The Fed slashed its Federal Funds rate by 50bps to a target range of 4.75-5.00% in September, a larger than expected move and the Fed’s first cut since March 20203. Safe-haven buying remained well supported in Q3 with the increasing Israel-Hamas/Hezbollah conflict encouraged more investment demand to hedge against market uncertainty. Global gold-backed ETFs registered US$7.1 billion in net inflows in Q3, the most since Q1 2022 as notable regions such as North America, Europe, and APAC regions including Australia all saw positive inflows.

        Central Bank demand, which were one of the key fundamental factors supported gold prices in the first half of 2024, remained robust despite gold trading at all-time highs. According to the World Gold Council, reported net purchases by central banks more than doubled to 37 tonnes in July, representing a 206% MoM increase and the highest monthly total since January 2024. Emerging market central banks such as Turkey, India and Poland continued to lead central banks’ gold purchases in 2024.

        Looking ahead, accelerated investment and haven demand globally from favorable tailwinds including lower real interest rates in the U.S, weakness in the U.S. dollar, persistent Middle East geopolitical tensions and any potential spike in market volatility from the U.S. Presidential election, may keep gold well supported in Q4.

        More on Gold

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