Good morning!
I am genuinely shocked we’re already in the back half of 2025. I am still using last year’s Christmas wrapping paper to wrap friends’ birthday presents. But now I’m like, maybe I should save it for December.
This could be a quote:
“Some things endure not because they resist time, but because they carry its weight, like Christmas wrapping paper”
For context: Lil goldy would be my rap name, if I rapped.
Your questions, answered
Question: Why is gold so expensive right now?
About two months ago, gold reached its highest price ever - around $3,800 an ounce. Why did this happen? And what drives the price of gold? And Max, this happened two months ago. Be better.
Imagine you run an investment company, and your goal is to make as much money as possible by putting other people’s cash into shares of various businesses.
Everything’s going well, until news breaks about a virus spreading globally. Governments are closing borders and shutting down cities. You put down the prosecco and think to yourself - this can’t be good for my investments. Companies won’t be able to operate normally, which will slash (our) profits.
So what do you do? Well, you look for something to invest in that won’t, be affected by economic, global or social chaos. You look for something that is a safe bet, relative to the turmoil everywhere else. And what do you find? Gold.
Investors refer to gold as a safe haven - something they buy in times of crisis or uncertainty because it tends to hold its value (or even increase).
What are the properties of gold that make it a safe haven?
Well, there’s a few factors:
Lower no default risk: Unlike bonds, shares, stocks, or bank deposits, gold doesn’t rely on anyone else’s promises to pay. If a company goes bankrupt or a bank fails, your shares or deposit might become worthless. But gold? It’s still gold. has no counterparty - it does not rely on anyone else’s promise to pay. Companies going bankrupt and banks failing will not affect the value of your gold.
Global acceptance: It is recognised and valued worldwide, and it has been used as a store of value for thousands of years.
Limited supply growth: You can’t just print more gold like you can with money - mining new gold is expensive, time-consuming and limited by what’s in the ground. This natural scarcity protects its value over time. Gold is naturally immune to overproduction.
Favourable physical properties: Gold It is durable, scarce, easily broken into small pieces, divisible, and highly portable. You can store a large amount of gold in a small space.
Let’s have a look at the price of gold. You can see that during and after big crises (e.g., the global financial crisis, the pandemic), the price of gold jumps up.
Note: Chart shows price of gold, USD per tory ounce. Data frequency is monthly, showing average price per month. | Source: DataHub
It all comes back to the safe haven idea, and a number of key factors all coming together.
Global tensions: There's been significant uncertainty around conflicts in the Middle East, ongoing US-China trade tensions, and the implementation of various tariffs by the Trump administration. When global stability feels shaky, investors buy gold.
Central banks stock up: Some central banks, including China and Russia, have been buying large sums of gold to make sure they aren’t too reliant on the US dollar or US government bonds (we can explain them another time!), which pushes up demand.
Most investors don’t buy gold bars, they buy and sell shares in companies on a stock exchange (like the ASX), and these companies own and operate vaults that store real gold. When the value of gold goes up, the value of the gold in their vaults increases as well.
It’s worth noting that you can actually buy physical gold bars - but when you consider storage and insurance costs, this is the less practical option for most of us.
The non-investment bit
Even if you don’t directly own gold or shares, changing gold prices can still impact your life in a few ways. The most tangible change you may see is in the price of gold jewellery, but you might also feel the shift in the value of the Australian dollar, which may become weaker if more people flock to safe-haven investments like gold.
A message from EatClub
Gold’s shiny, sure - but so is getting up to 50% off dinner
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Because while others are stockpiling bullion, you can be stacking up the savings - one delicious meal at a time.
As a golden cherry on top, EatClub are giving you a chance to win one of two double passes to the Sydney FC v Wrexham AFC friendly on the 15th July at Allianz Stadium. Head to our IG page for more info.
The week’s biggest finance headline, explained
Last week, the Australian Bureau of Statistics (ABS) announced that inflation was 2.1% in May, down from 2.4% in April. That sounds like good news, but let’s dig a little deeper.
Inflation data: looking under the hood
Remember the episode on inflation - it means that the Consumer Price Index (the CPI) rose by 2.1% in the 12 months to May. Basically, if you compare the prices of all the items in the CPI basket in May 2024 and May 2025, they increased by 2.1% on average.
Why the headline number can be misleading: When inflation data are released, focusing on the headline CPI number can be misleading.
Because it’s a basket, that number can be driven by a temporary surge or drop in the price for a singular item, which masks the true direction of the underlying trend of prices. For example, a massive spike in the price of oil due to war in the Middle East would cause petrol prices to shoot up, and inflation too. But that might mask a wider trend - maybe food prices are falling, rent inceases are slowing, and most other prices are stable.
So what should we do? Well, when inflation data are released, we should also look at two other things:
The trimmed median rate of inflation: This is where you go into the CPI basket, order all the items by how much their price has changed, exclude the items with the largest change over the relevant period (either positive or negative), and then calculate the rate of inflation. This is the RBA’s preferred measure of inflation.
The inflation rate of individual items in the CPI basket: We can also pay attention to how prices are changing for important items (like rent and insurance), which gives a good indication of the overall direction of prices.
So, if we dig into the May data with our new helpful pointers, what do we find?
The trimmed mean rate of inflation in May was 2.4%, down from 2.7% in April. This is the lowest it has been since December 2021.
The most significant price increases came from food items (e.g., eggs are up 19.3%), but these are likely temporary surges (remember the bird flu outbreak?).
Some notable declines from electricity prices (which fell 5.9%) and car fuel (which fell 10%).
Good news on insurance (which was 3.9% - its lowest rate in 3 years) and rent (which was 4.5% - its lowest rate in 2 ½ years).
(Quick note: all the numbers I just referred to are annual rates of inflation, showing how much prices changed over the past 12 months).
What is the upshot of all this extra digging? Well, the TLDR is that trimmed mean inflation is down, and some big ticket items like rent and insurance are also slowing to their lowest rates in years.
The RBA will meet next week to make its next monetary policy decision. They will look at all the elements we just looked at, make an assessment of the underlying price pressures, and decide whether to hike, cut, or hold rates. You’re getting so good at this stuff, they’ll be asking for your opinion soon!
A titbit for your group chat
Is AI going to steal your job? The answer is nuanced, and depends on a few factors. But some early evidence shows that, since the introduction of ChatGPT, employment is up in software and computer operations, but down in customer service.
Source: Chandar, 2025
But, as with most things on the internet, there’s the well-sourced, researched, evidence-based way of evaluating changes in the jobs market, or there’s willrobotstakemyjob.com, which the creators say is still based on complex data, but presents you with more of a ‘job security vibe’.
According to the rankings on the site, the ‘highest scored jobs’ that robots will not take include physios, nurses, OTs, construction managers, vets, electricians, and HR managers.
Those most at risk include shoe machine operators, telephone operators, motion picture projectionists, textile press operators, and transcriptionists.
TDA asks
