Monthly report (NO17 Gold) – May 2025

Monthly fund update

Key points

• NO17 Gold ended May up 4.5% (in Australian dollars, unhedged). In US dollar terms, this equated to up 5.0%, outperforming gold bullion and the universe of gold miners.

• The gold market consolidated following its significant move in the prior month in response to April’s Liberation Day shock.

• The general perception among investors (especially those who are not allocated to the sector) is that there isn’t much more upside for gold. This couldn’t be further from our expectation. We have a very positive outlook for the gold price and we believe ‘Liberation Day’ has lit the fuse on a much bigger upward move as capital is allocated away from US assets (especially US Treasuries).

• Gold mining stocks remain extremely attractive with valuations at what we believe are 25-year lows, notwithstanding a continuing uptrend in the gold price. We see this disconnect as temporary and a significant opportunity which markets are only just beginning to recognise.

• The potential for the global trade war to cause an inflation shock (at a time when inflation is already elevated and proving sticky), should be motivating investors to identify investments which would stand to benefit from such a scenario. We recall that the second inflation shock in the 1970s resulted in the gold price spiking by 179% over 12 months.