Spotlight on Australia - October 2025

Australia has found its golden fleece. As the price of gold has increased over 110% over the last five years, the value of Australia’s gold exports has almost tripled. Gold is now Australia’s second-largest export by value.

While the value of coal, LNG, and iron ore exports has been declining in the 2020s, the value of gold exports continues to rise (see chart below). How big is the Australian gold industry and why has the price of gold skyrocketed?

The Australian gold industry

1851 was the year that Australia struck gold, with large amounts found near Bathurst and Bendigo. Both finds triggered a gold rush with Australians and foreigners, including over 20,000 Chinese, flocking to the gold fields. Big finds in Tasmania (1852), Queensland (1857), and the Northern Territory (1871) saw Australia's population quadruple between 1851 and 1871.

In the 1890s, a new gold rush began in Western Australia. And today, that is where Australia’s largest gold deposits lie (see chart below).

In terms of total gold reserves, Australia leads the world with 20.3% of global reserves in 2023, followed by Russia (18.6%), South Africa (8.47%), USA (5.1%), and China (5.1%).

In 2024, China was the largest gold producer, followed by Russia, and Australia (see chart below).

The above chart shows Australia’s gold production falling since 2020, but the latest data and forecasts from the Department of Industry, Tourism, and Resources shows production and export volumes increasing over the next several years (see chart below). Of course, export values are largely increasing because of the recent increase in the price of gold.

The chart below shows the largest gold miners on the Australian stock exchange at the end of September. Northern Star Resources is up over 50% year to date.

Why has the price of gold surged?

The recent surge in the gold price has been driven by an increase in demand by central banks (see chart below). Meanwhile, Gold supply has remained relatively steady at around 5,000 tonnes.

During the 1990s and early 2000s, many central banks sold down their gold reserves. The global economy and politics were stable and gold is expensive to house.

More recently however, Russia and China have been rapidly increasing their gold reserves (see chart below).

Looking at gold’s share of total central bank reserves (forex plus gold), Russia has been moving more of its reserves into gold since 2014, but especially since 2022 (see chart below). This coincides with the beginning of the conflict in Ukraine in 2014, the Russian invasion of Ukraine in 2022, and the resulting growing number of international financial sanctions against Russia.

Key sanctions include the freezing of Russian forex assets by other central banks from 2022 and the removal of Russian banks from the international interbank payment system SWIFT in 2022. The US dollar has been turned against Russia, so it is not surprising that Russia has turned towards gold.

The debasement trade

More recently, gold has become a haven asset for those concerned with US government debt, US dollar weakness, and the unpredictability of US trade policy. Investors have always turned to gold in times of economic uncertainty but the current flight to gold is happening while the US economy is still robust, which is very unusual. The chart below shows how the correlation between the value of gold and US dollar-denominated assets has been weakening over the last year.

Final thoughts

Gold is having a moment, and Australia is basking in the glow. This coincides with increasing pressure on the iron ore industry from increased global competition and slow Chinese economic growth. No doubt there will be regular bouts of profit taking but so long as the war in Ukraine and uncertainty over US economic policy continues, gold will likely continue marching forward, and Australia along with it.