About the gold price
Gold is quoted in Australian dollars per troy ounce, a unit of about 31.1 grams that exists only for precious metals. It is held as a store of value and moves with real interest rates, the US dollar and global risk sentiment - and because it is priced internationally in US dollars, an Australian holder’s return is partly the AUD/USD rate rather than the metal.
Buying and holding gold in Australia
The figure quoted here is a wholesale price. The international gold benchmarks are struck in twice-daily auctions in London, administered by ICE Benchmark Administration, and what they price is unallocated metal delivered in London rather than any object a person could pick up. Wholesale gold moves in Good Delivery bars of roughly 400 ounces, and the London market accepts anything between 350 and 430 ounces as one of them, settling on gross weight multiplied by fineness.
Nothing sold at retail comes in that size. A buyer in Australia ends up with a one-ounce coin, a ten-gram wafer or a kilo bar, and the price of those carries the cost of refining, minting, distributing and insuring a small unit on top of the metal inside it. The same gap runs the other way on the way out, because a dealer buys back below the reference figure. The round trip has a cost at both ends, and the smaller the unit the larger that cost is in proportion to the metal.
The second decision is where the metal sits. An allocated holding is specific bars, identified by serial number, weight and assay, with the institution acting as custodian. An unallocated holding is a claim against the institution instead, and the holder is one of its unsecured creditors. The London market’s own guide draws the line as the difference between a safe deposit box and a current account. Allocated storage is charged for, and that charge is what the distinction buys.
Tax then turns on fineness and form. Gold of at least 99.5 per cent fineness, in an investment form, is input taxed under the GST Act, so no GST is charged on it. Investment form has a precise meaning, and it governs all three metals the Act recognises: a bar, wafer or bullion coin, bearing a mark the market accepts as a guarantee of fineness, sold at a price set by reference to spot. Jewellery and proof coins fall outside it. They are priced for what was done to the metal rather than for the metal itself.
Longer read: Why central banks hold gold, and what changed after 2022. Central banks bought more than a thousand tonnes of gold in each of three consecutive years, against a long-run average of less than half that. What changed, who was buying, and what a central bank's gold holding actually consists of.
See other metals and markets on the Australian markets hub.