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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Is gold the future of payment?

Many people have heard the expression that in Roman times an ounce of gold bought a Senator’s toga and today still buys a decent men’s suit. It’s a saying often quoted as proof that gold has enduring purchasing power.

However since the advent of paper money and subsequent abandonment of the gold standard, the asset has not been associated with currency in a traditional sense.

Keeping pace with the rapid technological innovations that have disrupted industries in recent decades, gold ownership is being transformed as it enters the digital arena. At the same time the latest advances have the potential to take the precious metal back to its monetary roots.

Digital consumers

Consumers armed with smartphones are demanding increasingly convenient and transparent financial services. This has resulted in the continuous development and widespread adoption of financial technologies, or fintech, which have popularised digital purchases and trade.

Technological progress has led to the emergence of new gold product categories, such as Exchange Traded Funds (ETFs) and even more recently a new pedigree of online-only vaulted gold providers. These product innovations, now readily accessible by mobile phone, have made investing in gold a simpler and more cost-effective experience.

Not only have they removed traditional barriers to the storage of physical gold, these technologies are enabling the democratisation of gold ownership, making the precious metal accessible to new segments of investors and consumers.

As it stands gold’s role in everyday purchasing is being transformed. Smartphone fintech is being developed that allows investors to ‘pay’ with physical gold as money. Utilising cutting-edge advancements in digital encryption, this new technology is refocussing the asset in the minds of millennials as a modern means by which to make everyday purchases.

GoldPass®

The Perth Mint is an innovator in the digital encryption arena. GoldPass®, its smartphone app, not only allows users to buy and sell gold instantaneously at any time of the day or night, but also facilitates peer-to-peer transfers – all in a highly secure environment.

GoldPass® is ideal for anyone comfortable with digital technology who wants to invest in gold. Their holdings are doubly protected through the use of digital encryption and by the fact that their metal is with a government-owned institution with a reputation of 120 years standing.

Thanks to the peer-to-peer capability of GoldPass®, it’s also the ideal vehicle to ‘gift’ gold to family members and friends. The technology is a forerunner to the concept of using gold as a means of payment, an idea that is beginning to have serious applications in retailing.

With fintech proponents predicting that 2020 will continue the digital trend in commerce – some even arguing that the fall of physical money is imminent – investors should be comforted by the knowledge that gold is evolving in the modern market with an investment case that is even more compelling.



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Is gold a commodity or a monetary asset?

Topics [ gold investment ]

Some people regard gold as simply another commodity. However, it can be argued that gold performs differently to commodities in general and more like a monetary asset. Some of the reasons for this are outlined below:

 • Gold does not typically move in step with the broader commodities market, especially during times of financial uncertainty and geopolitical turbulence. It is at these times that gold has often outperformed other assets, including a broad commodities index.

 • While the US may have abandoned the gold standard in 1971, central banks maintain huge reserves of physical gold.

Indeed, according to the Refinitiv Gold Survey 2019, in Q4 of calendar 2018 central bank buying recorded its largest quarterly net purchases this century, of 196 tonnes. This brought total estimated net purchases for the year to 571 tonnes, the highest annual figure since 1971. It also continued a trend in net buying by central banks from the beginning of this decade.

The first quarter of 2019 was also strong, with central bank gold purchases more than doubling year-on-year and Refinitiv expecting another year of elevated demand.


 • In the world’s two largest gold consumers, China and India, gold jewellery has been used for centuries as adornment and a store of wealth.

The lead-up to Lunar New Year in late January or early February is one of the busiest gold-buying times in China when consumers purchase various gold products as gifts or as personal investments.

During Indian wedding season, from October to December, large quantities of gold are traditionally bought not only for brides to wear, but also to give new couples what is seen as a time-honoured means of wealth preservation.

 • Gold is no longer used in currency that can be used in our daily transactions but it is highly liquid and readily exchangeable for local currency all around the globe.

In summary, gold is a finite resource that has been valued as a store of wealth for thousands of years encompassing countless periods of political tension and market volatility.

How to invest in gold

For those wishing to add gold to their portfolios, The Perth Mint offers a range of options for the modern investor.

These extend from traditional trade platforms and physical precious metal products to online accessibility and storage. We even offer a smartphone app that puts gold literally at your fingertips, enabling users to buy, sell and transfer gold.

Making gold investment more convenient than ever before, our GoldPass® app is meeting demand by utilising technological advances which are moving the asset firmly into the digital arena.

While gold is no longer used in currency, it could be on the way to re-establishing its traditional role.

More on this in a future blog post.

Find out more about our range of innovative investment solutions here.



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Why gold?

Across centuries gold's attraction as an investment has remained as constant as the yellow metal’s properties. 

Gold’s diversification benefits and ability to reduce risk at the portfolio level have continued to fuel demand from astute investors worldwide. 

Over the long term the precious metal has offered several key benefits to investors:  

  • Strong long-term returns: The gold price has delivered long-term returns of almost 9% per annum since the early 1970s.

  • Strong outperformance in low real interest rate environments: Gold prices have risen in 18 of the 21 years when real Australian cash rates have been 2% or lower, as they are today. The average gain during those years has been more than 20%.

  • Demonstrated hedge against equity market falls: Gold has historically been the highest performing single asset class in environments where equity markets suffer their biggest corrections. 

  • Currency diversification: Gold offers a de facto foreign currency exposure in an Australian investor’s portfolio and it has historically benefited from any decline in the value of the AUD.

  • Liquidity and simplicity: Gold is highly liquid and simple to incorporate into a portfolio. It is accessible to all investors and can be purchased in amounts as little as AUD 50.  

Gold is a demonstrated hedge against falling equity markets.

While other asset classes offer some of these benefits, gold is arguably the only asset that offers all of the above attributes in one easily accessible investment.

Given the economic and financial market environment investors face today, we expect that gold will continue to attract attention from investors around the globe. 

To learn more, download our Self-Managed Super Fund (SMSF) White Paper which outlines the case for gold in a modern investment environment particularly for SMSF trustees.



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Inflows into our ASX-listed gold product hit record highs

The price of gold in Australian dollars rose by 4% in July 2019, closing the month at AUD 2,065 per troy ounce. It has continued to rally in early August, with the price topping AUD 2,200 per troy ounce earlier today. So far it has been a very strong year for precious metals, with the gold price rising by 25% in Australian dollar terms over the past 12 months.
 
The robust performance has led to a notable uptick in investor demand for precious metals of late, which is evident across The Perth Mint’s range of investment solutions. 

Over the past few months we’ve seen significant inflows into our ASX-listed gold product, ticker code PMGOLD, which was launched back in 2003. July 2019 was particularly positive with PMGOLD now holding more than $200 million assets under management after topping 7% growth last month, the strongest in more than three years, according to the Australian Securities Exchange (ASX).
 
This growth aligns with the trends we are seeing in our depository offerings, which allow online, phone and email based trading for clients who wish to trade gold, silver and platinum with The Perth Mint directly. We’ve also seen a significant increase in sales of our minted bars and coins, with demand for silver products almost trebling in July. 

Finally, we’ve seen a huge increase in the number of Australians downloading our digital app GoldPass®, with the number of registered users and the volume of gold traded more than doubling since the start of the year. 

Inflows into PMGOLD reached record highs in July.

The growing demand for precious metals is reflected in the strong rally we’ve seen in the gold price in recent months. 

There are multiple tailwinds driving the uptick in demand for gold, and the gold price itself, which include: 

  • The continued plunge in global bond yields, with 10-year US government bonds now yielding less than 2%, while 10-year Australian government bonds now yield under 1%. Globally, the pool of negative yielding debt recently topped USD 15 trillion, according to a Bloomberg article.

  • Volatility in equity markets, with the ASX 200 dropping from over 6,800 points on 30 July to below 6,500 points by 6 August.

  • Continued concerns regarding the trajectory of the US-China trade war.The reduction in the US Federal Reserve funds rate, with expectations that the Fed will follow up with additional easing before the year is out.

In Australia, precious metal prices have received a further boost from the decline in the local currency, which was been falling against the US dollar for most of the past 12 months.  

The currency weakness has been driven by the sharper fall in Australian government bond yields relative to those in the US. We had reductions in the local cash rate in June and July, with market pricing now suggesting we’ll see a further two rate cuts by May 2020. 

The recent decline in the price of some of our key commodity exports such as iron ore, which has fallen by approximately 20% in the past month, has put even more downward pressure on the Australian dollar. 

Given the economic and monetary environment investors are facing, we are not surprised to see gold performing as well as it has been. 

Astute investors often allocate up to 10% of their portfolio to gold as potential protection against the type of volatility we are currently seeing in financial markets. 

Gold’s historical outperformance in low interest rate environments, such as the one we are in today, is also encouraging investors to move a portion of their portfolio into the metal. This is a trend that could be reinforced if central banks continue to ease rates in the coming months. 

To find out more about investing in our ASX-listed gold product, ticker code: PMGOLD, please download the factsheet

Alternatively, if you would like to speak to our depository team about our direct investment options, please contact us at depository@perthmint.com or call on (61 08) 9421 7250.


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Monthly Sales – July 2019

Topics [ Monthly Sales ]

Total ounces of gold and silver sold by The Perth Mint in July 2019 as coins and minted bars:

  - Gold (Au): 21,518 oz

  - Silver (Ag): 987,040 oz


NB This chart shows total monthly ounces of gold and silver shipped as minted products by The Perth Mint to wholesale and retail customers worldwide. It excludes sales of cast bars and other Group activities including sales of allocated/unallocated precious metal for storage by the Depository.



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Golden Mile to Super Pit – gold from Australia’s most famous outback mine used to create exclusive new coin for investors

Topics [ silver bullion coins gold bullion coins ]

Harsh, arid and lonely. The Western Australian outback is an inhospitable place. Despite the difficult conditions, however, men have pursued their dream of finding gold in this challenging region for well over a century. At Coolgardie in the 1890s, their hopes were well founded, for nearby lay what would become famed as the richest square mile on Earth.

Paddy Hannan, a 50 year old prospector originally from Ireland, walked the 600 kilometres from Perth to try his luck. Together with Thomas Flanagan and Dan Shea, he pushed a further 39 kilometres in a north-easterly direction and on 14 June 1893 made a discovery that was to change the face of Australia.

Within hours of the claim being registered, a stampede to the gold diggings had begun. As the news became more widespread, local men were joined by ranks of hopefuls from all over Australia and as far away as China, Europe, Africa and America.

Developed in 1893 for Western Australia’s arid conditions, dry blowing machines were equipped with bellows that separated dust and dirt from heavier gold.

As a result, Coolgardie expanded quickly and Kalgoorlie, Western Australia’s most celebrated gold mining town, grew up around Hannan’s Camp. With a honeycomb of ever expanding underground shafts and tunnels topped by headframes (winding towers), the area was memorably dubbed the Golden Mile.

Remarkably, more than 125 years after its discovery, the Golden Mile remains at the heart of the Australian gold mining industry – albeit in a dramatically different form!

The Super Pit

Amid a global recession in the early 1980s, gold experienced a sharp leap in demand. Rising prices breathed new life into the region which saw another huge boom in activity.

It was during this decade that businessman Alan Bond began buying up individual mining leases, the precursor of a seismic shift in the Kalgoorlie landscape – literally.

Bond’s vision involved sweeping away some 3,500 kilometres of underground workings and creating a single, enormous open cast pit. Ultimately, the project was completed by the Kalgoorlie Consolidated Gold Mines (KCGM) joint venture, which has created a void so vast that it can be seen from space!

According to KCGM, the Super Pit is 3.5 kilometres long, 1.5 kilometres wide and more than 600 metres deep – and is continuing to expand. Tonnes of rock are regularly blasted, scooped up and trucked away to the crushers. Even now the modern miners must remain wary of the potential hazards of old underground workings.


About 800,000 ounces of gold has been recovered annually over the past 25 years. This impressive quantity accounts for about eight per cent of Australia’s total gold output. In a country currently ranked second among the world’s top producers, it represents a truly remarkable resource.

Taking Australian gold to the world

Investors and gold bugs worldwide who are fascinated by the history of Australian prospecting can now claim a genuine piece of Super Pit gold for themselves.

Encapsulating the spirit of Western Australia’s golden heritage, the 2019 Australian Super Pit 1oz gold bullion coin comprises gold sourced exclusively from the iconic mine. Portraying the stepped sides of its enormous canyon-like hollow, the highly desirable release has a mintage of just 15,000.

The coin’s awe-inspiring scene is also portrayed on a pure silver version with a total mintage of 100,000.

Buyers in Australia are invited to purchase both coins from The Perth Mint online at perthmintbullion.com, in our Bullion Trading Room, open seven days a week at 310 Hay Street, East Perth, or through Customer Services on 1300 201 112 during normal business hours.

Overseas buyers should contact leading coin dealers.

Unique additions to the Mint’s renowned line up of 99.99% pure gold and 99.99% pure silver coins, both releases are issued as official legal tender under the Australian Currency Act 1965.



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