Well, gold seems to be the only asset climbing in value this week – fulfilling its traditional role as a defensive asset, one could argue. On Monday, we covered how a few ASX gold exchange-traded funds (ETFs) were benefitting from higher prices and cracked new record highs. Well, the highs have continued to flow today.
Let's take a look at the gold price itself for a moment though. On Monday, gold was fetching around US$1,876 per ounce, up from US$1,867 the previous week. This jump is what spurred the new highs we saw on Monday.
Today, the precious metal is asking US$1,923 per ounce – another 2.5% above where it was on Monday.
So it's no secret that these sharp rises in gold are being fuelled by the turmoil we are seeing in the global financial system right now. On Monday, we have the news that US bank SVB Financial Group had gone belly up. Today, everyone is talking about Credit Suisse's implosion.
Failing banks is one of the most disruptive events for a financial system to deal with. So it's perhaps no surprise to see investors panicking and heading into the 'safe haven' of gold.
But let's see where the rubber is hitting the road.
These ASX gold ETFs are at new record highs
So the ASX has seen not one, but two ASX gold ETFs hit new record highs today.
The first is the Global X Physical Gold ETF (ASX: GOLD). On Monday, we covered how this ETF had hit a new high of $26.49. Well today, that same ETF has climbed even higher and hit a new record of $26.94 per unit this morning.
It's not the only ETF at new heights either. The Perth Mint Gold (ASX: PMGOLD) ETF has also seen a new high today. Perth Mint Gold units hit their new record of $29.02 just after market open this morning as well:
Both of these ETFs allow investors to indirectly buy gold by holding physical gold bars on their behalf. Thus, the value of this gold and the ETF is directly affected by higher gold prices. So it's no surprise to see these two gold ETFs at new high watermarks this Thursday.
