Gold's incredible journey: a tale of boom and bust
The Golden Age: A Price Surge Like No Other
In the bustling town of Kalgoorlie, the buzz around gold's unprecedented rise is as palpable as the froth on a cold beer. Lauriska De Billot, a manager at the local hotel, confirms that the topic is on everyone's lips, with nearby mines expanding and new workers flocking in, bringing a much-needed boost to the town's economy.
Just a stone's throw away lies the Super Pit, an iconic open-cut mine that has produced over 60 million ounces of gold since the 1980s. This golden mile of riches is transforming the fortunes of its owner, Northern Star Resources, and reshaping the landscape of the Australian Stock Exchange.
A Golden Shift: Miners Take Center Stage
Gold miners are now a dominant force on the ASX, with even smaller producers making their mark. Atlas Funds Management's Hugh Dive notes this shift, emphasizing how these companies have gone from being virtually invisible to becoming a significant presence. Michelle Lopez from Pie Funds Management, managing $3.2 billion in funds, echoes this sentiment, highlighting the benchmark's dramatic tilt towards commodities.
In just two short years, Northern Star's shares have skyrocketed by an impressive 122%, outpacing retail giants like Coles and Woolworths. But Northern Star isn't alone; Evolution Mining's shares have seen an astonishing 400% rise over the same period, a testament to the success of its mines across Australia and Canada. Jake Klein, Evolution's chair, sums it up: "It's a cyclical business. We want to be countercyclical."
Surfing the Commodities Wave
Other companies, like South32, are also riding the commodities wave, with its Cannington operation in Queensland contributing to a nearly 40% share price increase. These rich seams are fueling yet another historic gold boom.
The Global Context: Gold's Meteoric Rise
The Minerals Council of Australia predicts that gold will surpass coal and natural gas to become the nation's second-largest export earner in 2026. This forecast is driven by record global prices and expanding mine output, with a 28% export growth predicted, reaching $60 billion.
Gold's price, along with its sister metal silver, tends to surge in response to significant geopolitical and economic events. The most recent rally can be traced back to October 2023, when Hamas' attack on Israel and the subsequent conflict sent shockwaves through the global landscape.
A year later, Donald Trump's reelection as US president provided another boost to gold's allure. The ensuing trade wars, tariffs, and geopolitical tensions further fueled gold's ascent, attracting investors from all walks of life, from seasoned professionals to everyday workers.
The ETF Effect and the Rise of Gold
Ryan Felsman, chief economist at Commsec, Australia's largest equities trading platform, notes the rapid increase in retail buyers snapping up gold coins and bars, with ETF demand amplifying this trend. The biggest ETF on the ASX, GOLD, has seen its funds increase by 25% to nearly $6.8 billion.
ETFs, structured as trusts, hold physical bullion in secure vaults, mirroring the price of gold, which reached an all-time high of around $US5600 on January 29, 2026. Silver's trajectory has been even more remarkable, rising by 298% over the same period. Even the crypto sector has joined the gold frenzy, with crypto giant Tether Holdings now controlling the world's largest known hoard of bullion outside of banks and nation states.
The Sudden Halt: A Bubble Bursts
However, the precious minerals' march came to an abrupt end in late January. Silver experienced its biggest daily drop on record, and gold plunged the most since 2013. The volatility was attributed to Trump's announcement of Kevin Warsh as the new Federal Reserve chair, a choice that investors believe may lead to less aggressive lowering of US interest rates.
Commonwealth Bank commodities analyst Vivek Dhar suggests that Warsh's appointment may not signal a sustained downturn for gold and silver prices, given the current policy landscape. He sees this as a buying opportunity, believing the market will resume its preference for hard assets relative to the US dollar.
The Resilience of Gold: A Safe Haven
Despite a sharp slump, gold is outperforming other safe-haven assets like Bitcoin, which has seen its value plummet since its peak above $US124,000 in October 2025. Jordan Eliseo, general manager at ABC Bullion, notes that queues at their Martin Place store are still common, with more first-time buyers than sellers.
Over the past 20 years, key upticks in the gold price have coincided with major global events such as the 2008 financial crisis, Brexit, and the onset of the global pandemic. Eliseo believes this latest surge is the biggest he's seen, with self-managed super fund trustees accounting for a quarter of ABC's bullion sales.
Gold's Structural Resilience
John Kochanski, a specialist advisor to Australian gold producers, emphasizes that gold has never experienced a price crash. He maintains that gold's structural resilience will continue to underpin its role as a long-term store of wealth, and explains why people are still buying, even at record prices.
"Corrections occur. Volatility is normal. Price collapse is not," he says.
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