Security is tight. “No hoodies!,” proclaims a sign to customers as they are buzzed by intercom through locked reinforced doors in a nondescript downtown city building.
Gold’s almost daily ascent since mid-February has left many analysts and other market watchers looking for explanations, as there is no clear catalyst for the rally.Gold tends to spike in response to globe-shaking geopolitical or economic events, but nothing earth-shattering has happened in the past few months to justify the latest surge.
In a small two-person partitioned booth on the floor above, Michael Kay, from Melbourne Gold Company, is also buying more than he is selling. “Most people do keep it under the bed, so to speak, or leave it here,” Kay says, noting that many dealers provide secure storage for a fee. “People are maybe questioning the high price. Is it going to remain here? Will it keep going? I’m pretty bullish. Gold always shines with inflation,” he says.Gold has been trading for months at around the $US2000 mark.
“A combination of banking crisis, economic concerns, and geopolitical factors are driving investors to gold,” Cameron maintains. “It doesn’t make any sense, right? We aren’t too surprised, given the lack of interest over the last three years in the gold equities,” he says. That’s a shift Euroz Hartleys expects to show up in the March quarterly reports of miners like Northern Star Resources, Evolution, Ramelius, Perseus, West African and Gold Road Resources. Euroz Hartleys would expect investors to then focus on smaller producers and explorers after a re-rate in these larger miners occurs.