The Australian share market has lifted slightly today, after a bounce on Wall Street overnight, with the price of gold reaching a new high.
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00:00Well, gold is regarded as a safe haven asset for investors, so when demand drives the price
00:06up, that's probably not good news, because it means there's something that investors
00:10think they need a safe haven from.
00:13And so it is at the moment, with gold the best performing asset this year, up 14% year
00:18to date and 50% since the start of last year, going above $3,000 US last night for the first
00:24time, or 4,700 Aussie.
00:27So what are investors worried about?
00:29Well, a year ago it was geopolitics, Ukraine and the Middle East, and now added to the
00:34anxiety is Donald Trump, or more precisely, tariffs, which are expected to cause a hit
00:40to economic growth, something that was endorsed last night by the OECD in its latest Global
00:46Economic Outlook, which downgraded world growth from 3.2% last year to 3.1% this year and
00:533% next year.
00:54US growth has been downgraded more, Europe has been upgraded, and the forecast for Australia
00:59cut from 1.9% this year to 1.8% next year.
01:05And that compares, by the way, with the Government's latest forecast for next year of 2.25%.
01:10So we'll see what they say about that in the Budget next week.
01:13The local share market went up again today, but not very much, and it was hard to discern
01:17any pattern.
01:18The US market also went up last night, as did Asian markets today.
01:22Iron ore fell 2.5%, apparently because of a fall in Chinese house prices.
01:26And the Aussie continued to rise as the US dollar falls, in anticipation of weaker growth
01:31and therefore lower interest rates.
01:34And that's finance.