About Perth Mint Bullion Blog

This blog discusses The Perth Mint's bullion coins and bars, providing information about our latest designs, mintages, sales volumes and sell outs. On a broader front, we share relevant research and opinions for anyone interested in gold and silver bullion investing.

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Who owns the world's gold?

Topics [ gold market gold analysis gold trading gold ]

USD 9.3 trillion: That’s the estimated market value of all the gold ever mined, just over 190,000 tonnes, based on an end of August 2019 gold price of USD 1,528.40 per troy ounce.
(Source: LBMA PM Gold Price

The owners of this gold fall into four broad categories:

Jewellery Buyers - This is the largest category of demand, accounting for almost 50% of gold ownership. Jewellery demand is predominantly driven by rising real incomes in Asia and the Middle East, where gold is seen as a form of wearable wealth.

Central Banks - Central banks own gold as part of their foreign exchange reserves. Collectively, central banks around the world own more than 30,000 tonnes of gold.

Investors - Investors buy gold in physical bar and coin form, as well as through depository services, such as those offered by The Perth Mint, and via Exchange Traded Products. It is estimated that in excess of 40,000 tonnes of gold are held by private investors worldwide.

Industrial Users - Gold is used in a range of industries from medicine and electronics to space technology. Industrial users are estimated to own more than 25,000 tonnes of gold.



Who buys gold now?

The annual GFMS Gold Survey offers a great insight into gold demand trends. In 2018, purchases of gold were as follows:

  • Jewellery demand was 2,129 tonnes
  • Bar and coin demand was 1024 tonnes
  • Central banks made net purchases of 536 tonnes
  • Industrial fabricators purchased 391 tonnes
  • Net flows into gold ETFs totalled 59 tonnes


Demand across the first eight months of 2019 has been driven by central banks, which continue to diversify away from the US dollar. This trend was perhaps best summarised by an August 27 Bloomberg article, Central Banks Just Love Gold and It’s Going to Stay That Way. The article focused on a report by Australian and New Zealand Banking Group (ANZ) which estimates net buying of gold by central banks will be more than 650 tonnes this year.

There is also increasing demand for gold ETFs which have built total holdings back towards 2013 levels.



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Physical gold demand a bright spot in Q3

Topics [ gold bullion gold ]

Global gold demand disappointed in Q3 2017 according to the World Gold Council’s latest Gold Demand Trends, but physical buyers bucked the trend with a solid increase in investment coin and bar purchases.

At 915 tonnes, total demand fell 9% compared the same period last year, with particular weakness seen in Indian jewellery volumes.

Stalling inflows into gold-backed exchange-traded funds (ETFs) also negatively impacted Q3 figures, the report’s authors said. Reasons cited for slowing ETF deposits included investors’ reluctance to bet against soaring stock markets.

Physical gold demand a bright spot in Q3

However, many used their strategic ETF holdings to complement their equity positions as a hedge against any possible downturn, they said.

On a further positive note, gold bar and coin demand increased by 17%, albeit from relatively weak year-earlier levels.

The report noted that China drove much of the growth in physical gold products, with investors buying on the dips to help the world’s largest gold consumer clock up its fourth consecutive quarter of growth.

“It was a tough quarter for gold demand,” according to Alistair Hewitt, Head of Market Intelligence at the World Gold Council. “India was coming to terms with GST and anti-money laundering regulations and, although we saw ETF inflows at 19 tonnes, they were significantly lower than last year.

“But there were some real bright spots: retail investment demand in China grew for the fourth consecutive quarter; the Turkish and Russian central banks added to gold reserves; and, after years of declines, we also saw increased use of gold in technology, supported by the demand for high-end smartphones.”

The Perth Mint finished the quarter on an upbeat note with a rebound in sales of gold bullion coins and minted bars driven by the launch of the Australian Lunar coin series for 2018 and healthy exports to China.

The Gold Demand Trends Q3 2017 is compiled with data provided by independent precious metals consultancy Metals Focus.



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Hot bullion coin offers new opportunity to enjoy Dragon and Phoenix design

Topics [ bullion coins gold gold bullion coins gold coin ]

Admirers of The Perth Mint’s China-inspired Dragon and Phoenix design have a limited opportunity to acquire a new gold bullion coin featuring both auspicious mythical creatures.

Their intricate depictions surrounding the representation of a flaming pearl appeared in 2017 on a highly sought-after 1oz silver bullion coin, and two outstanding high reliefs for collectors.

 

Bearing a 2018 year-date, the new coin is struck from 1oz of 99.99% pure gold and features The Perth Mint’s trademark bullion finish with polished design elements on a frosted table.

Perfect for those who require bullion in the trusted form of Australian legal tender, the coin also offers buyers guaranteed rarity with a strict limited mintage of just 5,000.

To take advantage of the Dragon and Phoenix 2018 1oz Gold Bullion Coin, registered customers are invited to place orders on www.perthmintbullion.com while stocks last. Purchasers in Australia may also call customer services on 1300 201 112.

International buyers should contact our Hong Kong distributor LPM as soon as possible.



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Gold a star performer in Australian minerals exploration

Topics [ gold ]

As gold adds shine to Australia’s lacklustre minerals exploration sector, what and who is driving the upsurge in activity?

Gold exploration rose 30 per cent year on year in the March quarter to make up 46 per cent of Australia’s total minerals expenditure, an Australian Government report released last week revealed.

Western Australia is still the core of the nation’s $155 million gold exploration activity, attracting 75 per cent of expenditure in the sector.

The diggers and dealers have been spurred by a forecast increase in world gold consumption. The June Resources and Energy Quarterly published by the Department of Industry, Innovation and Science predicts global demand to rise by 1.8 per cent in 2018 to 2,484 tonnes.

Our ancient desire for gold jewellery continues to be the overwhelming factor behind increased appetite for the precious metal. Jewellery accounts for 80 per cent of total fabricated demand and the report forecasts jewellery consumption to increase by 3.5 per cent in 2017.

Continued economic growth in India and China — the world’s two major jewellery markets — is predicted to support higher discretionary spending on gold into 2018. 

Technology linked usage of gold is also driving increased demand. 

Consumption for electronics rose by 3.7 per cent year on year in the March quarter. Growth in this use for gold, including wireless technology for smartphones and gold bonding wire, is forecast to be 2.2 per cent in 2017 taking the volume to 261 tonnes.

The value of Australia’s annual gold exports is forecast to total $16.5 billion in 2017–18 and $17 billion in 2018–19. 

Export volumes are forecast to rise by 4.5 per cent in 2018-19, reaching a peak of 334 tonnes. 

On the supply side, global mine production is forecast to rise by 1.5 per cent in 2017 to 3,305 tonnes. World production is then expected to plateau over the next three years, but this is dependent on new projects reaching commercial production.

By contrast to what is happening in gold exploration, investment in Australia’s mining sector as a whole has “declined rapidly in recent years and is expected to continue to do so”, said Mark Cully, Chief Economist at the Department of Industry, Innovation and Science, in his foreword to the report. He said this was evident in the reduction in overall mining industry employment. 



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How Is Gold Produced?

Topics [ gold investing buy gold coins gold coins gold bullion bullion coins gold gold bullion coins gold bullion bars buy gold ]

PRECIOUS METAL SERIES – 7

The days when miners could dig or pan for nuggets of gold are largely gone. Today, gold is generally extracted from the Earth’s crust as microscopic particles. 

Estimates put the amount of gold in the Earth’s crust at just 11 parts per billion! To recover a single ounce of gold, many tonnes of material must therefore be blasted and processed.

Gold mines sell unrefined gold in the form of doré bars. Australian doré bars are usually composed of between 70-80% gold and 10-15% silver. The lion’s share of these rough bars are processed into fine gold at The Perth Mint, which operates the largest LBMA-accredited gold refinery in the Southern Hemisphere.

Each doré bar first goes through a chlorine refining process, also known as the Miller Process. Originally conceived by Francis Bowyer Miller in Sydney during the 1860s, the Miller Process involves bubbling chlorine gas through molten doré gold so that silver (and most other metals) react with the chlorine to form silver chloride as slag on the top. The resulting gold is 99.5% pure and typically it’s cast into bars weighing about 400oz for use in wholesale markets.

The Wohlwill process is used to increase purity further. A casting of 99.5% pure gold is lowered into a bath of hydrochloric acid and then has an electric current passed through it. Acting as an anode in this electrolytic refining process, the casting dissolves and then deposits on a cathode with a purity of 99.99%.

The resulting cathodes are melted, granulated and then the granules are used to measure out exact weights of gold for casting into bar sizes from 1oz up to 50oz for retail investors.

How Is Gold Produced?


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Who Buys Precious Metal?

Topics [ buy gold coins gold coins buy platinum gold bullion gold bars bullion coins gold gold bullion coins gold bullion bars bullion buy silver buy gold bullion bars buy silver coins ]

PRECIOUS METAL SERIES - 3

In the Western world, gold was once almost exclusively the domain of royalty, the super-rich, professional traders and a group of ‘gold bugs’ - mavericks who for one reason or another distrusted the use of paper currency.

Two decades ago, few ‘ordinary’ people perceived much reason to invest in gold. In truth, they probably didn’t even know how to go about buying it.

But things have changed.

For many, the Global Financial Crisis was a game-changer. Generally unforeseen by economists, it threatened the collapse of large financial institutions, sent assets tumbling and rocked investor confidence.

In the midst of the turmoil, people from all walks of life came to appreciate the traditional view of gold as a ‘safe haven’ in times of crisis. As prices rose, even ‘mum and dad’ investors took the plunge – and if not with gold, then with silver, which can provide many of the same benefits associated with the yellow metal.

While it is not yet fair to say gold has gone ‘mainstream’, the average man on the street is now much better informed about gold ownership and the conviction that it is a valuable component of a ‘balanced’ investment portfolio.

Today, interest in gold coins and bars remains elevated in comparison to pre-GFC times. But here’s a thing – the attitude towards gold in the West still pales in comparison to the obsession for gold in Eastern cultures!



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