Gold is among the top ten Australian exports that has been consistent for over 4 decades with annual exports passing the billion mark. Based on reports, the 3 % annual growth of Australia’s gold exports has had a significant positive impact on the Australian economy.
Australia’s trading partners pertaining to gold are mostly Asian countries where the demand for the precious metal is explicitly high. The demand from China and the UK however has been driven by financial purposes more than any other. The Australian bureau of statistics refer to the type of gold that is used for financial purposes as ‘monetary gold’ while exports that are destined for the jewellery and medical and manufacturing entities are referred to as ‘non-monetary gold’.
The Australian gold trade in value and volume has been growing steadily since the 80s (see diagram 1) and according to companies that sell gold in Melbourne these figures are expected to continue the trend for the next decade.
The demand for Australian gold comes from a variety of countries for a variety of reasons, regular and constant gold buyers are essential towards the stability of the price of gold, as they have a significant influence towards the gold fixing of spot gold prices in London. The top 5 destinations that purchase gold from Australia include (but not limited to) India (mainly non monetary gold) followed by the UK (monetary gold) and the other 3 top destinations are Thailand, Singapore and Hong Kong. According to many companies that sell gold in Melbourne, India is expected to slow or limit their imports of gold with the new government reforms that are currently underway.
These reforms could amount to losses amounting close to a billion dollars annually if exports are not diverted to other destinations in order to maintain the balance of the precious commodity. However the market is not too particularly concerned with India’s pullout due to the rising demand for gold for investment purposes as debt concerns in the EU region and social unrest in the Middle East escalate.
The Australian gold industry have turned their focus towards investment gold as the ROI are higher and with Western Australia heading the gold stampede in raw and refined gold the import of Gold into Australia from the United States has observed a decline that may not recover as the Perth mint increasing its capacity as well as its productivity levels to cope with domestic demand.
According to a report from Bloomberg the Perth mint is largely responsible towards the growth in Australia’s imports and exports of the precious metal.