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Gold, Oil & Australian GDP Rocketing

Despite it being a quiet day on the ASX with regards to company announcements, after a barrage of earnings delivered at the end of February. We did, however, receive positive news on the recovery of the Australian economy.

GDP figures were released by the Australian Bureau of Statistics today, showing the Australian economy grew 3.4% in 4th quarter of 2021, recovering pre-pandemic levels in early 2020. These results exceeded analyst forecasts of 3% growth for the final three months of 2021, showing a strong recovery in the economy as a whole. The result took annual growth up to a nominal level 4.2% with the economy now 3.4% larger than it was in late 2019.

Following in-line with Stock Specialist's portfolio rebalancing towards the Consumer Staples sector. With Australia emerging from lockdowns, we saw a strong increase in consumer staples spending with clothing rising 42%, transport 49%, hotels and restaurants 24%, household goods 7.7% and recreation 17%.

Commodities and safe haven investments also rose with tensions and uncertainty rising in the Russia-Ukraine conflict. Silver was the best performer with the price increasing almost 5% as prices hit the highest levels since August. Silver is usually more volatile metal than gold but still tracks in line with the yellow metal’s performance. Gold being the primary safe haven commodity also increased in price approximately 2.38% to US$1946 an ounce. Oil prices also rallied strongly due to a less than expected supply reserve expected to be released. Despite the US government quietly indicating to domestic producers to increase output, the WTI Crude oil price increased 11% to US$106.34 a barrel.

Stock Specialist anticipates a further increase in these commodity prices and gold to hit $2000/oz almost in a matter of days and with more market uncertainty expected a further price point of $2200/oz to be reached.

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