By Nassim Khadem

Copyright abc

Amir Moradi’s family has been in the business of selling gold for generations but he has never seen demand for the metal this high.

For the past three years, they have run the store Jewellery for Melbourne in the city’s inner suburbs.

“The price of gold has been going up over the last two years and it has definitely had a significant impact on our business,” he tells ABC News.

The price of gold has risen by more than 50 per cent in the last 12 months and continues to set fresh records.

Spot gold hit an all-time high of $US3,990.85 overnight.

US gold futures surpassed $US4,000 an ounce for the first time in early trading, hitting a high above $US4,014.

UBS forecasts it will reach $US4,200 by the end of the year and stay there for most of 2026.

Gold is set to become Australia’s second most valuable resource export after iron ore, according to the Department of Industry, Science and Resources.

Its figures show that while there is a downward trend in iron ore earnings (it is expected to fall by $3.9 billion to $113 billion this financial year), the commodity still remains Australia’s biggest resource export.

Iron ore will account for more than 25 per cent of all resource and energy commodity earnings over the next two years.

But now, with the gold price soaring, gold exports are expected to increase by $12 billion to $60 billion in the current financial year, while LNG is expected to fall to $54 billion this year, tracking lower oil prices.

Gold is a safe haven in uncertain times

Mr Moradi says in uncertain times, consumers see gold as a safe haven.

People are rushing to buy their jewellery ahead of major milestones.

“They’d rather get the jewellery that they’re going to need next year in advance, to be able to buy it at a more cost-effective price,” he said.

But it is not jewellery that is most in demand.

More consumers want to buy gold bars and coins, but stocks are running short.

At The Perth Mint, demand for gold is not just being driven by central banks.

In the past fortnight, 7,500 customers have queued each week, many lining up to buy gold bars.

The Perth Mint’s general manager depository, John O’Donoghue, says that is unprecedented.

“If you look at our retail shop, on a daily basis, we’re having to close our queues at 3:30pm to cater for the number of people who are trying to buy gold or sell their jewellery,” he said.

The Perth Mint normally has three counters servicing bullion customers but have added four more temporary counters in its luxury jewellery store to keep up with the demand.

Investors can also trade in gold via a stockbroking account as they would shares on the Australian Stock Exchange.

Mr O’Donoghue says the Perth Mint’s PMGold ETP is one of the lowest-cost exchange-traded products on the market.

The benefits, he says, are no storage fees, the fund is backed by physical gold held at the Perth Mint, and a person’s holding can be converted into physical gold if they wish.

He says that has seen the number of unit holders increase by 72 per cent between January 1 and September 30.

The number of ounces of gold held is up 23 per cent over the same period to 338,572 ounces (10.53 tonnes).

Why geopolitical uncertainty and lower interest rates support gold buying

Analysts say global factors, including the US government shutdown and risk of recession in the world’s biggest economy, are driving the gold price higher.

“Gold is an excellent hedge against inflation. It’s also a hedge against uncertainty,” says Andrew McAuley, chief of investments at UBS Global Wealth Management.

Gemma Dale, director of investor behaviour at NAB, says “there’s a huge amount of central bank buying that has been driving the price higher”.

“You’ve got this extraordinary global scenario where risk assets have run very hard, but geopolitical risk is high. There’s real concern about central bank independence.”

Ms Dale says people are also trying to get exposure to the precious metal through exchange-traded funds.

“We’ve seen something like a tripling of exposure to those kinds of ETF’s over 12 months,” Ms Dale said.

“We have not seen a tripling of any exposure to many other things over the last 12 months.”

While most analysts forecast higher gold prices in the year ahead, Mr Moradi is worried that at some point, the price could tank.

“The price of gold is going up so fast and if it crashes at some point, it’ll be hard to recover from that crash,” he said.