Another fantastic week for gold, with the price closing up above a psychologically important level at US$2,006 per ounce on Friday. Gold has been driven by macro factors such as escalating Middle East tensions, together with a poor week on the US share market, which has led to risk-off positioning by traders and money managers. Significantly too, gold is continuing to rise despite ongoing strength in US 10-year Treasury yields, which are at a 16-year high around 5%.

And let’s not forget the fiscal situation in the US, where the national debt has reached a record of over $33 trillion, according to Treasury Department reports. It now costs $879 billion to service the debt, which represents 14% of the total federal spending.

The rise in gold is even more spectacular in A$ terms, which is now well above the A$3000 mark at $3,167 per ounce, as reflected in the two-year graphic below.

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