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Perth Mint Gold

 

To understand the history of the Perth Mint, you have to go back to the UK’s extensive role in shaping developments Down Under. Britain is at a crossroads historically during the present time, just as our cousins down in Australia are facing changing fortunes.

Established in 1899, the Perth Mint was created as one of three branches of the Royal Mint in Australia, to help refine and produce gold coinage, following the discovery of new gold supplies in Western Australia. Of the three branches set up Down Under, the Perth Mint is the only survivor, a remnant of an era long gone, but also a valuable resource to provide a bridge to a brighter future for both Britain and Australia.

Learn all about the backstory of the Perth Mint and the potential rewards it could offer for gold investors in 2021.

The great gold rush of 1899

The discovery of rich seams of gold close to the city of Kalgoorlie and the smaller town of Coolgardie was a catalyst that led to the creation of the Perth Mint in 1899. Back then, Australia was a dominion of the expansive British Empire, a colony which was starting to find its feet and make the most of the resource-rich land it found itself in.

The years 1899 to 1931 are a significant chapter in the Perth Mint’s history - during this time, the Mint claims to have created no fewer than 106 million Gold Sovereign coins. These items, still considered legal tender even today, were in circulation during the height of the British Empire, as economic expansion and profound change started to get underway in both the UK and Australia.

A casual glance across the first 32 years of the Perth Mint Gold Sovereign coinage reveals a fascinating snapshot of British imperial history. When the Perth Mint started striking these coins, Queen Victoria was approaching the end of her reign, Queen to millions of subjects across the globe. By the time the Mint ceased producing Gold Sovereigns in 1931, her grandson, George V had ascended to the throne.

What makes these coins so impressive is that they were struck in 22-carat gold, some of the purest you can hope to find. Obviously, the Empire is long-gone, lost to the mists of time. But gold is one of the most durable elements in the universe, and these moments in history are now preserved for posterity.

Australian gold - bursting at the seams

It’s an understatement to say that Australia is literally a goldmine. The country is home to 17 per cent of the world’s gold, making it one of the most gold-rich countries in the world. The supplies sitting beneath the Earth’s surface Down Under are equivalent to 9,500 tonnes - the Perth Mint plays such a pivotal role in all of this, because 60 per cent of Australia’s gold supplies are found in Western Australia, the region surrounding Perth itself.

Australia continues to thrive as the third largest producer of gold, behind the likes of China and Russia. This is all the more impressive, when you consider that China and Russia have populations of 1.3 billion and 144 million people respectively and significantly greater landmasses than Australia. By comparison, Australia is home to just 25 million people, going to show just how productive the country is, despite its size.

While the Gold Sovereign is now considered an item no longer in circulation or production, at least from the Perth Mint, that hasn’t prevented them from excelling themselves in producing some of the world’s purest gold bullion. In 1957, for example, the Perth Mint broke records, when it produced a proof plate giving a purity reading of 999.999 parts of gold per thousand. The seams of gold that run beneath Australia are densely-packed with high-purity gold, and this makes Perth Mint items some of the most exceptional on the gold markets.

By 1970, the Perth Mint found itself under the ownership of the Government of Western Australia, and the timing could have hardly been more spot on. That’s because, after decades of lying dormant, the price of gold was bracing itself for an explosive rally unlike any other seen in all of recorded history.

The winds of change

Britain and Australia are effectively members of the same cultural family, so it’s no coincidence that both nations are undergoing something of a shift in identity simultaneously.

Here in the UK, Brexit is dominating much of our political agenda, even despite the disruption caused by COVID-19. The bonds that tie Britain to Australia run deep - the Empire faded out of existence over the course of the 20th century, leaving the UK with a need to find a role for itself in a post-colonial post-war world. Europe seemed like the obvious place to develop close ties for a time.

Joining the European Community (EC) as it was once known was the prime ambition of successive governments after the Second World War. However, this keenness to get closer to our neighbours was rebuffed not once but multiple times, especially during the era of French President Charles de Gaulle. These rejections stung on some level, and a sense of distance developed between the UK and Europe over time.

What started as a disagreement over economic integration became a full-blown political revolution for quitting the European project altogether. The UK’s first major move away from Europe arguably began with exiting the Exchange Rate Mechanism, a precursor to the Euro, in 1992. Brexit was the second stage of this decoupling, as an increasing number of Britons began to lose interest in the idea of ceding sovereignty to Brussels.

Both Black Wednesday in 1992 and the Brexit saga from 2016 onward have had a remarkable impact on the pound, pushing it lower and boosting bullion prices in £GBP.

Amidst this, Australia has been grappling with changing economic fortunes, trying to define itself in a volatile geopolitical context. The country became a major supplier of resources for China, fuelling a boom that lifted millions of Chinese citizens out of poverty over recent decades. However, the great boom in China is ebbing - Australia must diversify to continue achieving impressive economic growth.

A logical solution is for both Britain and Australia to embrace their close to familial bonds and reach out to one another.

Changing views of gold

The world of physical gold, especially gold bullion produced by the likes of the Perth Mint, has shifted immeasurably since the Mint’s founding in 1899. For over 40 years, the US confiscated bullion under Executive Order 6102, when the Great Depression was at its worst. For many years, gold was a mysterious commodity that few could dream to see with their own eyes or even touch.

However, it all changed in the 1970s. The Bretton Woods system, which had served as an effective post-war currency framework, pegging the US dollar to a fixed price of gold, collapsed in 1971, when the Nixon administration turned the US dollar into a fiat currency. For much of the post-war era, gold was tucked away and backed up the value of currencies all over the world. From 1971 onwards, it was every country for themselves.

The dollar devalued, along with the pound and the Australian dollar. Rampant inflation followed for the remainder of the 1970s. Gold, which was no longer anchored to one price, was free to begin a price rally, which would see it climb to valuations few could have conceived to be possible. All the while, each piece of gold that had ever been produced by the Perth Mint was becoming all the more valuable by the day.

In 1970, an ounce of gold cost £15. By 1980, the price of gold had leapt to £260 per troy ounce, before settling down to a lower level of £172 per troy ounce by 1999. A price rally during the commodity boom of the 2000s took gold past the £1,000 level for the first time in 2011. In the midst of this impressive bull run in gold prices, the Perth Mint came under new management yet again.

In 1987, a State Act of Parliament created the Gold Corporation, which took control of Perth Mint operations, overseeing fresh production of coinage in gold, silver and platinum, all to be considered legal tender for the thousands of eager investors and collectors to purchase for years to come.

The Perth Mint - on top form

As mentioned previously, a boom in gold prices has been in progress since the year 2000. Gold is now valued at almost £1,500 per troy ounce at present - worth significantly more than ever before, at least in nominal terms. One of the great innovations that the Perth Mint has achieved during this recent bullion boom is the minting of the world’s largest gold coin.

Weighing a tonne, this coin is 80cm in diameter and 12cm thick, with a purity of 99.99 per cent. Unveiled in 2011, the coin had a face value of A$1 million, but its true valuation is closer to A$50 million.

Some of the factors which have been instrumental in helping gold prices climb to higher highs in pound sterling terms include a weakening Chinese economy, the COVID-19 crisis and, of course, Brexit. Gains in the US dollar-denominated gold price have been impressive since the start of the new millennium, but added weakness in sterling means that UK gold investors have seen far greater gains than those seen in the US.

Understandably, the Gold Bullion Company is receiving increasing demand for gold bullion and other precious metals items. There is something of a new mania surrounding gold yet again, and we are pleased to be in a position to provide an exciting new range of Perth Mint coins and bullion bars over the coming years. As noted previously, the Perth Mint has a reputation for producing some of the purest gold in the world.

If you’re in the market for bullion and care about factors including purity, the Perth Mint is, without a doubt, one of the best sources of it you will find through the Gold Bullion Company. If you are interested in learning more about buying Perth Mint gold coins through our website, don’t hesitate to get in touch.

Call us on 01902 623 259 to get in touch with our team - they are on hand to respond to any queries you may have and to help facilitate any purchases you may wish to make.