By Anthony Fensom
Gold’s record-breaking run has eased following recent conflict in the Middle East, along with rising inflation and interest rates. Yet, with bullion demand remaining strong, Australian miners remain upbeat over the precious metal’s long-term outlook.
‘Gold’s lustre is bright for investors as a safe haven in times of trouble and also as a hedge against inflation,’ says Peter Hwang, Managing Director of Superior Resources.
‘Prices remain extremely high historically, and this will support investor demand, facilitating increased exploration activity across Australia.’
Gold prices hit a record high of US$5417 (A$7584) an ounce in March 2026 after geopolitical tensions in the Middle East escalated, with buyers regularly seen queuing to buy bullion in Sydney’s Martin Place. Yet, the US-Iran conflict has recently seen gold lose ground amid rising US inflation and interest rate expectations, slipping to US$4499 as at 4 June.
‘Inflation expectations, higher yields and a stronger dollar are likely to keep gold under pressure in the near term; however, the macro backdrop should eventually turn supportive for investment flows into gold over the medium to longer term,’ according to ANZ Research’s 15 May report.
‘Central bank demand remains robust and is likely to strengthen further this year amid heightened geopolitical risks. Firmer demand from China will likely counter India’s weaker demand after the latter’s policy changes,’ it added.
The Australian bank sees gold recovering to US$5600 an ounce by year-end, rising to US$6000 by mid 2027, with long-term positives including the United States’ ‘deteriorating fiscal position, ongoing US dollar diversification and geopolitical uncertainty, [which] continue to reinforce gold’s role as an insurance’.
Investment bank Goldman Sachs expects gold to reach US$5400 by year-end on central bank buying, with gold having now overtaken US bonds as central banks’ favourite investment. UBS, however, is less bullish, predicting gold will reach US$5050 an ounce in 2027, down from its previous projection of US$6200.
Record gold prices in early 2026 saw a shift in demand dynamics, with demand from retail investors and central banks remaining high, but with jewellery demand slumping, according to the World Gold Council’s (WGC’s) 29 April report.
Total quarterly gold demand reached 1231 tonnes in the first quarter of 2026, up two per cent year-on-year, with demand reaching a record US$193 billion, up 74 per cent. Demand from retail investors surged, hitting a record in China along with other Asian markets, yet jewellery demand dived by 23 per cent in reaction to higher prices.
Central banks remained active, adding 244 tonnes to global reserves in the first quarter, with buying exceeding the previous quarter’s and also the five-year average.
‘Gold’s volatility has markedly increased in 2026, with prices peaking above US$5400 per ounce in January before a significant but contained correction. The combination of price momentum and heightened geopolitical risk propelled investment demand, most notably in Asia, as investors sought security in physical gold. Alongside this, continued central bank buying offset tactical selling,’ says WGC Senior Markets Analyst Louise Street.
‘Looking ahead, the geopolitical risk premium should continue to support investment demand, though higher-for-longer interest rates may present headwinds, especially in Western markets. Jewellery spending is expected to remain resilient even as high prices weigh on volumes. On the supply side, mine production is expected to grow modestly, although potential energy shortages could temper that outlook.’
In Australia, gold has become the nation’s second-largest export earner, generating an estimated A$61 billion in export revenue in 2025, with the Australian Government’s official forecaster predicting export earnings of A$72 billion by fiscal 2027.
Higher prices and investor activity saw a substantial increase in gold exploration in the year to March 2026, rising by 53 per cent to A$157 million, according to the Australian Bureau of Statistics.
Yet, despite record prices and export revenues, the nation’s gold production has barely risen in 30 years.
‘Australia has gradually become one of the hardest places in the developed world in which to build and operate mines,’ corporate adviser Patrick Gibbons told the Australian Financial Review, pointing to the federal government’s 2024 blocking of the A$1-billion McPhillamys mine.
‘A growing web of environmental approvals, duplicative regulation, escalating construction costs, labour shortages, infrastructure bottlenecks, and increasingly uncompetitive royalty and taxation settings are steadily eroding Australia’s attractiveness as a mining destination,’ he says.
The potential is highlighted by a Minerals Council of Australia Victoria study, which found that tripling Victoria’s gold production to reach one million ounces by 2035 ‘would deliver more than 10,000 new jobs across mining and related services, putting A$1.2 billion in wages in the pockets of Victorians’.
Among new projects, Superior Resources is eyeing potential near-term production at its Steam Engine gold project in Queensland, with a 3000-metre reverse circulation drilling program planned.
‘Further resource growth will greatly enhance the cash flow potential and development options for the project, which may include a staged production pathway (for example, commencing with toll treatment before transitioning to a standalone processing operation) or progressing directly to a standalone processing operation,’ the company said in its 30 April quarterly activities report.
Also in Queensland, recently listed explorer Moonlight Resources says initial drilling results at its Leo Grande prospect ‘demonstrated the presence of a broad, near-surface gold system’, with further drilling planned within its Clermont gold project.
Australian gold miners are also active internationally, with Theta Gold Mines announcing on 1 June that it had secured a ‘pathway to gold production’ at its TGME gold mine in South Africa, following a successful US$90-million bond issue to fund the mine’s construction.
The increasing spotlight on gold has also fostered merger and acquisition activity, with Regis Resources announcing in May 2026 a $10.7 billion ‘merger of equals’ with Vault Minerals to create ‘Australia’s next major gold producer’ with globally significant gold production of more than 700,000 ounces from its mines in Western Australia and Canada.
‘Gold is here to stay as one of Australia’s major mining industries, and with demand and prices set to remain strong, its future shines brighter than ever,’ Hwang says.
