Gold price falls as Iran and Israel tensions ‘settle down’

Gold price falls as Iran and Israel tensions ‘settle down’

[Music]
okay well let’s keep that markets theme
going comsec Chief Economist Craig James
joins us Craig we just said the gold
miners got crunched today just explain
to us what’s really happened with gold
over the past 24 hours or so well it’s a
case of good news is bad news for for
gold gold is very much a safe haven so
people buy it in troubled times there
was some concerns late last week in
terms of the situation between Iran and
Israel and whether there was going to be
very significant stash between the the
two that could affect um oil supplies
could affect you economic growth not
just in the region about the the globe
uh but um things settled down over the
weekend and so what we saw on on Monday
in the US and the European markets was a
fall in the gold price and it was down
by 2.8% to
$2,346 40 now remembering gold hit a
record high on Friday on concerns about
the instability in the Middle East and
we saw that that basically you sort of
unraveling you said in terms of the US
sessions and of course that did play out
in terms of the the gold sector to today
gold sector is round about 3% of overall
capitalization on on the share market so
it’s not a big but it’s not a small one
sector either but you did have the likes
of um northern star down 3 and a half%
yont down in the order of
4.6% and Craig just give us a sense how
strongly has the gold price really
lifted this year due to all those
geopolitical tensions that you just
talked about yeah since the start of
this year we’ve something seen something
like a
13.3% increase in the gold price in US
dollar terms but in Australian dollar
terms given our currency has been
falling it’s even been better for our
gold producers and up in the order of
20.4% so certainly you sort of it it
Rose to a record high last Friday as
well in Australian dollar terms as well
as US dollar terms in Australian dollar
terms it got above $3,700 $ 3775 to to
be precise uh gold one of our
significant exports we’ve got very
significant exports here here in
Australia here in Australia can
basically get anything in terms of the
commodity space um and certainly in
terms of the resources uh gold is the
Fig fifth biggest export um and the
fourth biggest export of goods you see
here in Australia counting for around
about 3% uh 3.6% of our total trade and
Craig just generally give us a sense of
how the Aussie dollar has been going for
the past couple of weeks well the Aussie
dollar is very much like gold it’s
somewhat a fair weather friend when in
the good times the Aussie dollar is very
much you sit in favor um and what we’re
seeing you sort of is last week and
easing of the the Aussie dollar today
it’s you lifted somewhat but still
sitting around about that 642 Cent Mark
seems to be very very comfortable about
the low 60
and um certainly in terms of the Middle
East the situation hasn’t totally
settled down we’ve got to see some
downside risk for for the Aussie in the
current environment and some upside risk
in the price of gold and look we
obviously have the budget in 3 weeks I
or prices critical for that are they
still fairing a bit better than what
treasury’s
expecting yeah the iron oril price
continues to be well above what um
Federal treasury is estimated in terms
of the budget accounts $18624
so was only up a smidgen on Friday on
Monday up by 310 of 1% but iron or is is
strong yester at the moment when you
compare it with the cost of production
and a BHP Rio foros skew dig it out of
the ground at something like $20 a ton
and you’re selling for $108 62 a ton
that’s not a bad margin anyone’s um
anyone’s book yeah and you said Gold’s
roughly 3% of the ASX but I imagine I or
would be a much bigger portion yeah iron
or is you know sort of either number one
or number two depending on which way you
look at it you know with the coal sector
but yes it’s much more significant in
terms of um our overall export um
position and certainly is therefore more
important in terms of the budget um
speculation in terms the budget the the
budget’s effectively sort of had a very
low price around about $60 a ton as
forp we’ve we’ve run out of time thanks
very much for coming on okay

CommSec Chief Economist Craig James says there were “some concerns” late last week on whether there was going to be a “very significant stoush” between Iran and Israel.

Mr James said that it could have affected oil supplies and “could affect economic growth not just in the region but around the globe.”

“Things settled down over the weekend,” Mr James told Sky News business reporter Edward Boyd.

“What we saw on Monday in the US and European markets was a fall in the gold price.

“Gold hit a record high on Friday on concerns about the instability in the Middle East.”