Gold has always been one of Australia’s chief exports since the gold rush in the 80s. Australia’s gold exports have grown tremendously over the past few decades in terms of quantity and quality.
The fluctuating nature of the stock market has convinced many people to invest in precious metals. And, such reliable and safe assets that Australians are flocking to are gold coins and bars from Gold Bullion Australia.
Even though gold bullion is perceived as a safe-haven asset, you must still understand the reasons for its fluctuating costs before beginning your investment journey.
Here are some factors that primarily affect the cost of gold bullion in Australia.
Production Status of Gold
Across the world, Australia remains one of the head honchos in gold mining along with other countries like the United States, China, South Africa, Peru, and Russia. So, ultimately, the status of gold production plays a crucial role in altering the cost of gold bullion in Australia.
The price depends on the oscillating supply and demand factor. The risks and hazards associated with gold mining also contribute to changes in its cost.
AUD and Gold Bullion Price
Currently, Australia is the third-largest gold producer in the world. And, the country exports about $5 billion worth of gold every year.
The price of gold bullions indeed has a positive correlation with AUD. Whenever gold prices go up, AUD increases along with it in parallel, and whenever gold prices go down, AUD goes down as well. Unlike USD, there exists a positive relationship between gold and AUD.
So, if you are planning to invest in gold as an asset, then bars from Gold Bullion Australia will make an excellent choice as it is more precious than coins or jewellery.
Central Bank Reserves
Every primary trading currency in the world is either influenced or controlled by the central bank of that particular issuing country. In Australia, it is the Reserve Bank of Australia.
So, these central banks hold gold in reserves. When banks diversify the monetary reserves into gold, their price starts to rise. And when the gold prices increase, the cost of gold bullion in Australia also increases.
Industrial and Jewelry Demand
Globally, jewellery accounted for more than half of gold demand during the last two years, according to the World Gold Council.
Just like other countries, Australia plays a vital role in gold exports. Countries like India are a fast-growing market for Australian gold, as the country’s increasing wealth translates to more residents investing in bullion.
Besides jewellery, there is also a demand for industrial and technological use of gold. Therefore, the cost of Australian gold bullions can be primarily affected when the need for consumer goods fluctuates.
Last but not least, the factor of uncertainty plays a significant role in the rise and fall of gold bullion prices in Australia.
Political uncertainty, governmental instability, stock market dips and rises, terrorist threats, and a list of various other political and socio-economical factors contribute to the changing costs of gold bullions and gold in general.
If you are an investor, practicing constant vigilance and staying up to date with current affairs will do you good. Also, visit a reliable website and keep an eye on the cost of gold bullion every day.