Australia is set to earn more gold than any other resource
Australia announced on Tuesday that it expects gold to be its second-most valuable resource export this financial year after iron ore, dislodging the liquefied gas. Concerns over geopolitical instabilities fuel demand for safe-haven metal.
The Department of Industry's September quarterly report stated that Australia's gold imports will increase by A$12 Billion ($7,9 Billion) to A$60 Billion in the current financial period ending June 2026 as it exports more gold for higher prices.
This would be a huge increase in Australia's LNG export earnings, which are expected fall by A$54 billion to A$48billion this year and the following year due to lower oil prices.
The report also said that a lower interest rate environment is expected in the United States to support gold above $3,200 an ounce for the next two-year period. Gold prices reached a new record on Monday, and are now trading at close to $4000 an ounce.
Gold has bucked the trend of Australia's resource export earnings, which have fallen as energy prices return to normal after the surge at the start of the Ukraine war that pushed earnings up to a record of over A$460 billion between 2022-2023.
The total Australian energy and resource exports are expected to decline by 5% in the current year to A$369 Billion, and further fall to A$354 Billion in the next year.
The report stated that "Commodity Markets are anticipating a slower growth in the world as a result rising trade barriers, and monetary conditions which are still on 'the restrictive side of neutral' in the US."
Over the next two-year period, iron ore will continue to be the mainstay of Australia's resource export earnings. It will account for more than 25 percent of all commodity and resource earnings.
The report raised its iron ore forecast by 10%, to $87 per metric ton in this financial year. This is compared to a previous forecast in June. Steel demand has been boosted by a new hydro dam proposed in Tibet, and China's desire to reduce overcapacity within its steel industry.
Australia expects iron ore revenues to fall by A$3.9billion to A$113billion in 2025-26, and then A$103billion in 2026-27.
(source: Reuters)
