Australia enters this latest gold rush from a position of relative strength. The economy is still benefiting from a tight jobs market after the pandemic and a run of strong export prices, particularly in energy that have pushed tax receipts to close to 25.7% of GDP this financial year. That momentum now meets a new twist. Gold, long a financial safe haven, has suddenly jumped ahead of natural gas to become the nation’s second-largest export and this underscores how quickly global market dynamics can reshape Canberra’s budget outlook.
The numbers behind the shift are striking. Since early 2024 the gold price has climbed more than 150%, lifted by heavy buying from emerging-market central banks, expectations of lower interest rates and investors looking for shelter amid geopolitical tensions and trade disputes. In the final quarter of the year Australian resources groups shipped about $16.5 billion worth of gold, ahead of roughly $14.3 billion in natural gas exports, based on figures from the foreign affairs and trade department. Treasury’s December forecasts assumed prices around US$4300 an ounce would ease over time, but the metal has instead pushed towards US$5200 and this has prompted economists to flag a possible corporate tax upgrade ranging from a few hundred million dollars to as much as $2 billion. At the same time a stronger Australian dollar, higher labour and energy costs and broader profit pressures across the economy look likely to trim some of that upside.
Beyond the immediate revenue bump the gold rally hints at wider shifts in Australia’s resource story but also shows its limits. The country is already the world’s third-largest gold producer and holds about 22% of known reserves. Elevated prices appear to be encouraging more activity. Exploration spending on new gold areas is up around 45% in the year to September 2025 and several gold producers seem poised to join the main sharemarket index. Yet analysts caution this does not look like a repeat of the last mining boom, since part of the price surge appears tied to financial market speculation rather than long-term supply and demand. The outcome for the May budget in that case seems to be a welcome but temporary boost that helps offset growing pressures in areas like childcare, defence and disability support, which is useful for now but unlikely to resolve the underlying structural deficits that will shape Australia’s public finances over the longer term.
