Gold set to become Australia's second-biggest resource earner

Core Insights - Australia anticipates gold to become its second most valuable resource export after iron ore, surpassing liquefied natural gas (LNG) due to increased demand driven by geopolitical instability [1][2]. Gold Exports - Gold exports are projected to increase by A$12 billion ($7.9 billion) to A$60 billion in the current financial year ending June 2026, benefiting from higher prices [2]. - The rise in gold exports will outpace LNG, which is expected to decline to A$54 billion this financial year and A$48 billion the following year due to lower oil prices [2]. Gold Prices - A lower interest rate environment in the United States is expected to support gold prices above $3,200 per troy ounce over the next two years, with current prices nearing $4,000 per ounce [3]. - Gold is experiencing a contrasting trend compared to other Australian resource exports, which have seen a decline as energy prices normalize after the spike caused by the Ukraine war [3]. Overall Resource and Energy Exports - Total Australian resource and energy export earnings are forecasted to drop by 5% to A$369 billion in the current financial year, with further declines expected to A$354 billion the following year [4]. - The report indicates that commodity markets are anticipating slower global growth due to rising trade barriers and restrictive monetary conditions in the US [4]. Iron Ore - Iron ore remains a crucial component of Australia's resource export earnings, accounting for over 25% of total earnings in the next two years [5]. - The iron ore price forecast has been raised by 10% to an average of $87 per metric ton for the current financial year, supported by steel demand from a proposed hydro dam in Tibet and China's efforts to reduce overcapacity in its steel industry [5]. Future Projections for Iron Ore - Despite the price increase, Australia expects a downward trend in iron ore earnings, projecting a decline of A$3.9 billion to A$113 billion in 2025-26 and further to A$103 billion in 2026-27 [6].