Factors that Drive Gold Prices in Australia

Factors that Drive Gold Prices in Australia

Gold has always maintained a reputation for being a safe investment. The yellow metal has an inherent value; over four decades, Australia’s gold prices have risen over 20% on average.

When you plan to invest in this growing asset in Oz, it is best to consult a precious metal trading specialist. To have a better perspective about the historical and current gold prices, click here; with more awareness, you can discuss your investment options with a gold dealer better. Here are some of the top factors that drive gold prices; you need to consider them when deciding to buy this physical asset in Australia.

Central Bank Gold Reserves

Central Banks have been consistent buyers of the yellow metal; emerging market money entities have led this with about 700 tons of gold purchases.

As per a recent report, the central banks of Kazakhstan, Poland, Russia made record-breaking gold purchases in 2019. Experts believe that the outlook for 2021 looks promising, with central banks planning to diversify their significant dollar stock, thus driving the gold rates.

An Increasing Investment Demand

Leading gold dealers recommend gold as a long-term investment, owing to its positive outcomes over time.

And with the entry of gold- supported ETFs, gold is no longer an alternative investment but a mainstream opportunity that you can explore by consulting a leading specialist. As mutual and hedge funds hold most of the ETF gold, this shift has enabled an average growth of nearly 15% year-on-year over the past two decades.


Fiscal and Monetary Policy

Understanding the severity of the ongoing pandemic, RBA recently cut rates to a significant low of 0.5%. It slashed the rates by another 0.25% and offered about A$13 billion into the banking structure.

With the financial crisis gripping all the countries, the central bank does not have any other choice but to print money. Top professionals dealing with gold see this as an excellent opportunity for the yellow metal to be the primary beneficiary in this situation. The reason being that a rising fiscal deficit affects the confidence you would have in the economy, thus spurring the precious metal‘s demand.

The Australian and US Currency Pair

When you compare the two currencies, there is an increasing downward force on the AUD/USD. And the pandemic has further accelerated the fall in the exchange rate.

As per the latest statistics, the interest rate disparities are in favour of the AUD. And with credit markets facing problems, the US currency is a safer resort. Top professionals suggest that such trends also reflect in Australian gold prices.

Gold Production

Australia counts among the top players in gold mining. The world’s gold production is a critical driver of gold price.

However, industry leaders explain that it is now more tedious to procure quality gold reserves, as it is no longer readily available. It leads to the high gold price, which is evident from the live charts. You can analyse the gold price trend, which will give you a better idea of how the gold prices have fluctuated over the years.

Worldwide Demand

In 2018, Oz’s domestic gold market consumed nearly 55 tons of gold, and like in Australia, the global demand for gold will continue to increase in the coming years.

While a significant chunk of demand comes from the jewellery industry, there are technology and industrial uses for gold, typically in medical device manufacturing.

Market experts suggest that as consumer goods’ demand increases, such as electronics and ornaments, gold prices will rise.

From 2004 to 2019, gold prices in Australia have gained about 9% per annum, and the country presents a positive outlook for this physical metal.

Engage an experienced gold bullion trading company that offers the best gold trading consultation and investment services like super fund management. Review the gold price live charts and factors that affect the cost trends to invest in this precious metal promptly.




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