Australia is the world’s third-largest gold producer and is home to some of the most technologically sophisticated and innovative mines. The impacts of high gold prices are real and immediate: higher revenues, increased royalties, and additional employment in regional economies.
In FY2023, gold was Australia’s third-largest export, behind iron ore and coal, and contributed more than AUD $27 billion to the economy. With prices going even higher in 2025, that figure is poised to break new records. Gold mining companies, from major producers to junior explorers, are enjoying increased margins and renewed investor interest.
Local investor demand for gold is also building. Australian-traded gold ETFs like The Perth Mint’s ASX:PMGOLD have seen strongly increased inflows in 2025, as physical bullion demand remains high, especially from Self-Managed Superannuation Funds diversifying portfolios and hedging against inflation and market risk.
What Should Investors Watch?
Beyond the direct drivers explored above, gold is also influenced by broader macroeconomic indicators that shape its short to medium-term price movements.
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The gold price often moves inversely to U.S. bond yields and the strength of the U.S. dollar. In 2025, a weaker dollar and steady-to-declining yields have created favourable conditions for gold, but reversals in either could shift sentiment.
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Inflation expectations also matter. If expectations remain anchored despite fiscal or geopolitical shocks, gold’s value as an inflation hedge could face pressure.
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Volatility indicators (such as the VIX, credit spreads, or risk-off flows in equity markets) also impact gold. Periods of rising volatility and falling confidence in risk assets tend to benefit gold as capital rotates into defensive assets.
For Australian investors, currency movements add another layer of complexity. The AUD/USD exchange rate has a direct effect on the local price of gold. A weaker Australian dollar amplifies returns for local holders of gold, making currency exposure an important portfolio consideration.
Summary
Gold’s recent price performance reflects a range of global factors, including geopolitical developments, interest rate dynamics, and changing approaches to reserve management by central banks. These influences have combined to support demand across both institutional and private markets.
For Australia, these conditions highlight the importance of maintaining a competitive and resilient gold sector. The Gold Industry Group plays a role in highlighting the contribution of gold to the national economy and supporting greater awareness of the sector’s long-term value.
