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Gold isn’t usually the star of the show in Australia’s economic story. We talk far more about iron ore, LNG, coal, and even lithium. Yet over the past couple of years, gold has quietly muscled its way back onto centre stage — and with good reason. The gold price has doubled in less than two years (Figure 1). 

According to the Minerals Council of Australia, gold is “on track to become Australia’s second-largest export earner, fueling national prosperity”. Australia’s gold export earnings rose 42% to $47 billion in 2024-25 and are projected to increase a further 28% to $60 billion in 2025-26.

And Australia, as one of the world’s largest gold producers, is benefiting in ways that aren’t always obvious.

Gold Among Australia’s Top Manufacturers? Yes, Really.

One of the more surprising details I came across recently was in IBISWorld’s latest ranking of Australia’s top manufacturers by revenue (Figure 2). There, nestled among the usual giants — energy refiners, steelmakers, packaging firms, and biotech leaders — were two major gold businesses: the Perth Mint and Pallion Group, another significant gold producer.

That’s not something you would have expected even a few years ago. But when the gold price surges as dramatically as it has, the economics change very quickly. Higher global prices flow straight into export earnings, boosting revenues for miners, refiners, and the broader supply chain.

It’s a reminder that gold remains a quiet powerhouse in the Australian economy — not always in the headlines, but increasingly important in our export mix when global uncertainty is high.

So What’s Actually Driving the Global Gold Boom?

Gold doesn’t double in price because of one factor. This surge reflects a combination of forces, each pointing to rising global uncertainty.

1. Inflation fears aren’t dead yet

Although headline inflation has come down in many economies, investors remain uneasy about the long-term outlook. With government debt at historically high levels, markets know that one way governments escape fiscal trouble is through inflation — intentional or not.

2. Record global debt is flashing red

The world has never been more indebted relative to GDP. Many investors worry that sustained deficits will eventually require debt monetisation — effectively printing money — especially in the US, Europe, Japan, and parts of the developing world. Gold, with its limited supply, looks attractive when fiat currencies feel less certain.

3. Geopolitics is more tense than at any time since the Cold War

From the war in Ukraine to instability in the Middle East to strategic competition between the US and China, the global environment is fraught. Gold tends to spike when the world feels riskier, and that is precisely what we are seeing.

4. Declining trust in institutions

This is harder to quantify but just as important. Confidence in political stability, fiscal responsibility, and even central bank independence has taken a hit in many advanced economies. Whether justified or not, the perception drives behaviour — and investors turn to safe havens.

Put simply, gold is rising because people are worried.

For Australia, that worry translates into higher export revenues, stronger profits for gold producers, and more investment flowing into exploration and production. 

But we shouldn’t forget that the very forces pushing gold up are the same ones signalling fragility in the global economy.

5. China’s massive gold buying spree

A big part of the story is simply China. China is suspected of purchasing far more gold than it publicly reports — potentially hundreds of tonnes this year alone (see this Financial Times report).

This matters because when one of the world’s largest economies quietly accumulates gold at scale, it tightens global supply and pushes prices higher. But more importantly, it signals that China itself may be hedging against geopolitical risk, currency volatility, or future sanctions pressure.

The effect on the gold market is unmistakable: China’s appetite is big enough to move prices on its own.

A Brief Word on BRICS and Talk of a New Currency

There has been growing chatter about BRICS nations — particularly China and Russia — exploring alternatives to the US dollar, including commodity-backed mechanisms that might involve gold.

I touch on this only lightly here because the topic deserves careful unpacking. The short version is this: while there is strategic motivation for BRICS to consider ways to reduce reliance on the US dollar, any realistic shift would take decades and involve significant political and economic hurdles.

If you’re interested in the deeper debate — including whether a gold- or commodity-backed currency is even feasible — I discuss it at length with economist John Humphreys in the latest episode of the Economics Explored podcast. It’s a fascinating conversation that adds valuable context to the current moment.

What This Means for Australia

A booming gold price is good news for Australia — but it’s not an unqualified good.

The opportunities

• Higher export earnings flow directly into national income.
• Mining investment could rise if high prices persist, particularly in WA.
• Government revenues benefit from company tax and royalties.

Gold can provide a stabilising influence when other export commodities are volatile.

The risks

• The gold price can be volatile when driven by fear.
• If global conditions calm, the gold price could fall sharply.
• Treasury forecasters need to be cautious about baking elevated prices into medium-term projections.

The broader message is that Australia is in a lucky position: when the world gets jittery, our mineral wealth becomes more valuable. But that doesn’t make the underlying global risks go away.

Final Thoughts

The surge in gold prices tells us something important about the world today. It signals anxiety about inflation, government finances, geopolitics, and institutional trust. For Australia, it brings benefits — but also an obligation to read the global mood carefully and think strategically about our economic position.

Gold may be glittering right now, but it’s shining brightest because the world seems darker than usual.

If you’d like to explore the geopolitical and monetary angles further, I encourage you to listen to my conversation with John Humphreys on Economics Explored. It’s a timely discussion about trust, currencies, and what the next decade might hold.

Gene Tunny, Director, Adept Economics

Published on 20 November 2025. For further information, please get in touch with us at contact@adepteconomics.com.au or call us on 1300 169 870