Gold price suffers biggest fall in over a decade

The gold price suffered its biggest fall in more than a decade, while profit takers moved in rare earth miners.

Transcript

00:00The gold price had fallen more than 6% at one stage, which was the biggest fall since

00:062013, but it came back a bit and is now down a bit less than 5%. Silver fell 7.9% and platinum

00:126.1%. The falls today are hardly surprising. Yesterday, the gold price had increased $1,000

00:18or 30% in two months at the same time as the global share index had increased 8%. So that

00:25tells you gold is not being seen as a safer alternative to shares, which is the usual

00:30motive for buying it. The people queuing up outside the bullion shop aren't panicking about

00:35an uncertain world. They're speculating, hoping to sell it to someone else quite soon for

00:40more than they paid. But the only buyers not doing that are global central banks. They're

00:45buying it to replace US treasuries, aka government IOUs, in their international reserves. They

00:52started doing that when Russia invaded Ukraine in 2022 and the US froze Russia's US dollar

00:58assets, which made a lot of other countries worry about their own dollar reserves. So

01:02now central banks hold more gold than American paper for the first time since 1996.

01:09On the share market, it was a day for getting out of gold stocks and taking profits on rare

01:13earths. The best gain was Woodside after it upgraded its oil and gas production forecasts.

01:18On the subject of rare earths, here's a follow-up graph showing global shares of known reserves.

01:24We're fourth, with about one-eighth of China's, although that's just what's known. There are

01:30apparently 89 groups of geologists now scouring the country looking for more. If one turns up

01:35in your backyard, offer them a cup of tea. And the Aussie dollar is still 65 US cents. And

01:41that's finance.

01:42And that's finance.