- A leading economist who predicted the current bull run on gold believes prices "still have some upside."
- HSBC Chief Economist for Australia Paul Bloxham says the fundamentals are in place for further investment in gold.
- However, he also acknowledged recent "volatillity" and warned this could also continue over the coming months.
An ounce (about 28 grams) of gold now costs above $6,000 AUD for the first time in history, up more than 30% since the start of the year.
Australia has seen a surge of investment in gold over the past few months, and after a sudden drop of more than 6% (from about $6,700 to just over $6,200) over Tuesday and Wednesday, some investors might feel they've missed the boat.
However, HSBC Chief Economist for Australia Paul Bloxham told the Savings Tip Jar podcast he still thinks gold prices have a "bit of upside" heading into next year.
"We're partway through the run [but] the forces at work that are supporting gold, some of them are quite fundamental," he explained.
"It's global uncertainty, it's concerns about the outlook for inflation, it's concerns about Federal Reserve independence, a lot of these things are going to be around for a while.
"I think one thing you can say... is that gold prices are going to remain elevated relative to history over the coming period."
In an earlier podcast appearance in April, Mr Bloxham said gold was one to watch for investors - since then the price has increased by more than 20% despite the dip earlier in the week.
@savings.com.au Time to invest in gold? HSBC Economist says those concerned about potential volatility in markets could instead consider some old school alternatives! #investing #ausfinance #investment #gold ♬ original sound - Savings.com.au
Volatility to remain?
At the same time, Mr Bloxham said "volatility" in gold prices will "certainly" be prevalent moving forward with so many retail investors now buying gold.
"Finding the right level as to what the gold price is going to be... is not that easy," he told the podcast.
"Investors [are] getting sort of caught up in it and pushing it higher, and then there [will be] some corrections along the way."
Crazy scenes in Sydney, Australia as locals line up to buy gold amid frenzy.
— Jesse Cohen (@JesseCohenInv) October 17, 2025
Is this the top? pic.twitter.com/rZPYNYQ2oG
Gold and stocks going up together
Historically the value of gold is inversely correlated with the share market.
When stocks are going down and there's less confidence in the economy, gold (a traditional safe haven for investors) tends to appreciate.
What's been unusual about this latest gold bull run though is that it's also coincided with markets across the world booming, the ASX 200, the S&P 500 and the Nasdaq all hitting record highs in recent months.
"I think the best explanation is that at the same time investors want to hold... more risk assets, there is a caution about wanting to hold more US dollars and nominated assets," Mr Bloxham said.
"Some of those [historic] correlations may very well start to reassert themselves and maybe just in the last period where we've seen gold prices could down, that might be a sign that those correlations which hold in the medium term might start to be a feature of what's going to drive things going forward."
See Also: Gold Standard Explained
Are global markets on precarious footing?
Mr Bloxham said AI was an important part of why markets around the world are performing so strongly despite the simultaneous interest in safer assets like gold.
"A part of what's driving up the equity market is expectations of improved productivity around the world in part because of the AI story," he told the podcast.
Nvidia became the world's most valuable company in terms of market cap largely off supplying chips to power AI deep-search and large language model platforms such as ChatGPT.
Recently though, concerns have been growing that there's an AI bubble developing - which could mean markets are set for a painful correction like when the 'Dotcom bubble' burst in the early 2000s.
Bank of England officials have flagged 'stretched' valuations particularly for tech companies focused on AI, and have warned there could be a "sharp" correction that would reverberate around the world.
However, AMP Bank Chief Economist Shane Oliver says there's also reason to believe markets are in better shape now than in the early noughties.
"Dot com stocks were making little in the way of profits, but magnificent seven [the biggest tech companies] stocks are making huge profits," he said.
"Global business conditions...are still at levels consistent with reasonable economic growth."
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