Gold continues to drive the Australian economy

The Australian gold mining industry has kept its importance as the key contributor to the country’s economy over 2020-2021.

There hasn’t been much stability in the world since 2019. However, throughout the entire world, one thing remained constant – gold.

Even as the price of most commodities fluctuated in response to supply and demand, geopolitical issues, and other global crises, gold has bucked the trends and managed to survive and thrive through the craziness.

Over the last year, many investment commentators have consistently talked about how gold has been the safest and most reliable commodity in the past 24 months.

2020 was gold’s strongest year. The price of the precious metal rose by 25% as the pandemic and the associated fiscal response saw bonds plummet and investors shifted their attention to bullion. This affected the inflows into the gold exchange-traded funds and mints like Perth Mint experienced record inflows at the height of it all. In 2021, the price of gold has been subdued but this does not mean precious metals cannot continue playing the role it plays in investor portfolios especially now in these inflationary times.

In September 2021, The Perth Mint reported that it had made a $56 million profit out of a $26.35 billion turnover in the financial year of 2020-2021. This is the most the mint has made in its 122-year existence. Profits and turnovers like these make The Perth Mint, Australia’s biggest gold, and silver exporter.

Gold generates jobs and feeds families. The gold industry provides over 30,000 jobs. Not only that but it supports over 200,000 indirect jobs for people in Australia. As one of the most exported commodities, gold generates almost $25 billion in export revenues per annum. Gold generates royalties that can be used to fund government infrastructure projects and improve community services. In this way, the gold industry supports the economy of Australia and ensures that there are resources to support Australia and ensure that its citizens enjoy prosperity nationwide.

The Perth Mint was able to deliver an extra $41 million in taxes to the state government in 2020-2021 which means that the total amount that the mint has paid in terms of tax in the last 10 years or so. That took the total tax paid to Western Australian to $230 million in the last decade.

The bulk of gold mined in Australia is refined and transformed into bullion bars then minted into bullion products that are later sold to investors.

Over the last two decades, there have been a high number of economic crises from the NASDAQ crash of 2000 to the global economic crisis of 2008 and the Covid pandemic in 2019 that all contributed to the increase in the price of gold from $300 an oz. to more than $1,700 an oz.

China has been the world’s biggest producer of gold and Australia has been close behind but from January to June 2021, Australia’s production of gold was four tonnes more than the world’s number 1 producer.

In addition to the increase in supply, there are over 200,00 tonnes owned by individuals and banks in the form of gold jewellery, coins, and bars. This means the supply of gold is stable but it will continue to grow annually.

This Article was brought to you by:

Melbourne Gold Company

Suite 701, Level 7 / 227 Collins St

Melbourne, VIC 3000

(03) 8678 2085

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