Australia’s gold mining majors collectively gained about $7 billion on Monday as the US-Israel war on Iran gives the precious metal yet another price boost.
An ounce of gold rose 2.5 per cent overnight to $US5360 ($7540) to flirt with the $US5485/oz record set in late January.
Investors flocked to the safe haven asset as businesses and governments across the globe brace for the economic fallout from upheaval in the Middle East.
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“We expect energy producers, gold miners and defence stocks to outperform, while transport-intensive sectors such as airlines, logistics and discretionary retailers face pressure from higher fuel and freight costs,” Ord Minnett head of private wealth research Simon Kent-Jones said.
“The conflict is currently expected to be short and contained; however, the scale of Iran’s retaliation and the rapid disruption to energy markets highlight the risk that this episode proves more economically significant than recent Middle East flare-ups.
“If credible de-escalation emerges, market volatility may normalise within weeks, limiting economic damage.
“However, a prolonged conflict and sustained disruption to the Strait of Hormuz would represent a structural energy and inflation shock, with significant implications for global growth, policy rates and portfolio positioning.”
Australian-based gold miners enjoyed strong gains on Monday. The top three by market capitalisation — Northern Star Resources, Evolution Mining and Greatland Resources — added 4.8 per cent, 6.5 per cent and 4.6 per cent, respectively.
The gains meant all three broke their share price records.
About $7b was added in market capitalisation on Monday by the top-10 biggest locally based miners.
The price of an ounce of gold has climbed from record to record with little resistance over the past two years — more than doubling in value since the start of 2024, driven by significant geopolitical uncertainty and global inflationary pressures.
Most of Australia’s gold production comes from WA.
The WA Government in January ruled out a gold royalty rate hike from its current 2.5 per cent to 3.75 per cent despite the State’s miners increasingly enjoying fat profit margins.
In March 2015, with gold at about $1520/oz, a review by the Department of Mines and Petroleum recommended the gold royalty rate be increased from 2.5 to 3.75 per cent.
Former treasurer Ben Wyatt in 2017 tried to introduce the recommended 3.75 per cent rate but a fierce industry backlash killed off his proposal.
The State Government reaped $739m in gold royalties during the 2025 financial year while leaving $369.4m on the table by not adopting a 3.75 per cent rate, Budget papers show.
WA is on track to forgo about $525m of gold royalty revenue this financial year, based on a conservative assumption that production will remain steady and an ounce of bullion maintains its average of $5860 since June 30 last year.
