You could argue that, above any other precious metal, Australia is built on a foundation of gold. Australia may have become a very different nation if not for the discovery of gold in the early 1800s and its subsequent rise to popularity in the 1850s.
Gold rushes in NSW and then Vicotria attracted hundreds of thousands of migrants to the goldfields, bolstering Australia’s population and adding some much-needed diversity to the mix.
Between 1851 and 1871, the Australian population quadrupled from 430,000 people to 1.7 million as migrants from across the world arrived in search of gold. While it had been known about for a while in Australia, the local authorities were wary of what the knowledge of gold might provoke in the local convict population and chose to keep its existence hidden for a time.
That was until around 6000 Australians set sail for California, hoping to make their fortune in the gold rush there. Local governors needed this to start promoting and paying for commercial quantities of gold in Australia, protecting the skinny population and sparking the gold rushes that would be formative for the young state.
An article from the Geelong Advertiser in 1851 gives a sense of what the Ballarat gold rush was like in full swing:
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“There are, we should say, about a thousand cradles at work within a mile of the Golden Point at Ballarat. Allowing five for each cradle, the population within a radius of five miles must be about seven thousand men.”
The ecstasy of gold had indeed taken over, and while some did strike it rich, usually by rorting their business partners, most returned to their homes at the end of the 1860s worse for wear and without a speckle of gold dust to show for it.
What Makes Gold so Precious?
Humans have used gold as a currency since ancient times, with the first gold coins struck by King Croesus of Lydia (an area now part of Turkey) around 550 BC. From there, Gold was used as currency in many countries for thousands of years before the introduction of paper money.
But, as a metal, gold itself is pretty unremarkable. These boring traits make it more suitable for human currency than any other of the periodic table’s 118 elements.
Primarily, it hardly reacts with the other elements, making it resistant to corrosion and rust, which many different elements suffer from.
It’s also relatively rare, rarer even than the so-called rare earth elements. At the latest guess, if you gathered all the gold produced in the world to date, you’d be left with just a glittering 20-metre cube.
Australia has always produced a generous share of this, greatly benefitting the local gold mining industry.
Gold can also be smelted or melted at a relatively low temperature, making it a better ‘clay’ for human creativity, including various currencies. But of course, It’s the beauty of gold that captivates people’s passion like few other metals.
However, this desirability has a downside in that the price of gold can fluctuate wildly, making it a poor choice as a storage of value in modern times. From a price of less than $200 in the 1950s, gold is now trading at over $2000 per ounce and can fluctuate up to 50% in value in a swing.
As a currency, the problem is that gold supply depends on mining output rather than economic needs.
Exploring Australia’s Modern Gold Mining Industry
Even though gold is no longer a broad currency, its sheer dollar value continues to support Australia’s thriving mining industry. Considered a hedge against the value of currency and of inflation, the demand for gold remains high with investors.
In turn, gold miners experience a direct benefit in their share price from the metal’s continued popularity. Gold is having a moment in the sun after prices soared to a record US$2,114 an ounce in early March 2024.
Australian gold miners on the ASX, in turn, experience a 10% improvement in value. Here are the top ten performers in early March and over the last year in Australian ASX-listed gold mining companies:
Ticker Company Price 5-Mar 4-Mar 1-Year
RED Red 5 $0.36 4.41% 6.25% 163.0%
WGX Westgold Resources $2.32 4.98% 13.27% 141.7%
EMR Emerald Resources $3.08 2.84% 3.46% 115.8%
GMD Genesis Minerals $1.80 5.74% 7.59% 78.9%
RMS Ramelius Resources $1.59 5.30% 5.19% 44.6%
BGL Bellevue Gold $1.64 2.50% 3.56% 39.6%
RSG Resolute Mining $0.38 1.35% 4.93% 33.9%
NST Northern Star $14.18 3.35% 6.03% 33.2%
CMM Capricorn Metals $5.18 2.98% 4.79% 32.1%
PDI Predictive Discovery $0.21 -2.33% 11.84% 20.0%
Summary and a Golden Outlook
As the world recovers from Covid 19, the economic prospects for gold look more robust than ever. With interest rates expected to drop throughout 2024 and as global currencies remain in flux, gold will be the safe haven some investors crave.
After all, in terms of supply and demand, there is still only a limited amount of gold available to produce and purchase. These traditional realities, combined with modern economic ones, look set to keep gold at the top of the list of valuable commodities for the foreseeable future and its value high.
All of this bodes well for the continuation of Australia’s long-lasting gold mining history and today’s industry. Australian gold miners are some of the world’s most advanced and safest operators, continually unearthing products that trade at a premium and are highly desirable.
In summary, the allure of gold has captivated people from ancient times through the formative gold rush years of nations and into the modern gold mining era. The signs are that this long history may continue to play out, providing a glittering golden bounty to the land Down Under and those lucky enough to host the element.
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References:
https://www.nma.gov.au/defining-moments/resources/gold-rushes
