Australian Gold Exports Surge Boosted By German Demand

Gold exports from Australia surged from August to September, according to data released by the Australian Bureau of Statistics (ABS).

Non-monetary gold exports rose 17% in the period, an increase of $217 million in seasonally adjusted terms.

Germans are buying a lot of gold from Australia through the Perth Mint, according to the Australian Financial Review.

Germans purchased gold and silver coins worth almost $487 million from the mint last financial year and the trade has boomed on the back of events such as Brexit and the global financial crisis. The 2016-17 sales represent more than 158 tons of gold and silver turned into more than 4 million commemorative and special edition coins by the mint.”

Germany has a budding love affair with gold. Over the last 10 years, gold investment has boomed in Deutschland. Last year alone, Germans poured €6.8 billion ($8 billion) into gold investment products, with 22% of German investors buying gold over the past 12 months. Over the last 10 years, Germany has established itself as a 100 ton-plus per year market for gold bars and coins.

Perth Mint chief executive Richard Hayes said German banks have created a national distribution network for Australian gold to satisfy surging investor demand.

Germans have a great affinity for gold, from people of very modest means through to billionaires. What we see is that Perth Mint coins end up across the whole strata of German society. Germans have had eight different currencies in the last 100 years. Gold is the one thing that has held its value consistently as those currencies have come and gone.”

The Chinese also buy a lot of Australian gold. The Shanghai Gold Exchange sold 230 tons of gold bullion last year worth about $11 billion. Most of the Australian gold flowing into China is in the form of gold bars.

Even as gold flows out of the Land Down Under, gold production is falling. Australia ranks as the second largest gold producer in the world behind China. But according to MinEx Consulting analysis, production will peak in just four years and then begin a steep decline. Australian mine output will max out in 2021 and then fall by half into the mid-2050s, as aging mines close down.

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