Gold's Surpassing of LNG and Metallurgical Coal in Australia's Export Value Hierarchy

Australia's resource export landscape is undergoing a seismic shift, with gold poised to eclipse liquefied natural gas (LNG) and metallurgical coal in export value by 2026–27. This transformation signals a broader realignment of global commodity demand and underscores the need for investors to recalibrate their portfolios. As geopolitical tensions, energy transitions, and macroeconomic volatility reshape markets, gold's ascent as a strategic asset offers both a hedge and a growth opportunity.

The Drivers of Gold's Resurgence

Gold's projected export value of A$56 billion in 2025–26, according to a DiscoveryAlert analysis, reflects a confluence of factors. Global demand for the metal has surged, driven by central banks-particularly in emerging markets-stockpiling reserves amid U.S. dollar instability and geopolitical fragmentation, according to a Reuters report. Australia's production is also expanding, with output expected to rise from 289 metric tons in 2025–26 to 313 tons in 2026–27, the DiscoveryAlert analysis notes, bolstered by new projects in Western Australia and Victoria. Meanwhile, gold prices have been propped up by inflationary pressures and a flight to safe-haven assets, with prices reaching multi-year highs, according to a Financial Post piece.

The Decline of Coal and LNG

In contrast, coal and LNG face structural headwinds. Metallurgical coal, once a cornerstone of Australia's export economy, is forecast to generate A$39 billion in 2025–26, the DiscoveryAlert analysis finds, but its long-term outlook is clouded by decarbonization policies in key markets like the EU and China. Thermal coal's value is projected to fall further to A$28 billion, as renewables and domestic production in Asia reduce reliance on imports.

LNG, meanwhile, is grappling with oversupply. Australia's LNG export revenues are expected to drop from A$72 billion in 2024–25 to A$45 billion by 2029–30, a Financial Post analysis projects, as U.S. and Qatari production floods global markets. This decline is compounded by weakening oil prices and trade barriers, such as the EU's carbon border tax, according to the Resources and Energy Quarterly.

Strategic Rebalancing for Investors

The shift in Australia's export hierarchy mirrors a global reconfiguration of commodity priorities. For investors, this signals an urgent need to rebalance portfolios toward assets that align with macroeconomic tailwinds. Gold's dual role as a hedge against inflation and geopolitical risk, coupled with its growth potential in a low-interest-rate environment, makes it an attractive addition to diversified portfolios.

1. Hedging Against Geopolitical Uncertainty: As conflicts in the Middle East and U.S.-China tensions disrupt supply chains, gold's status as a "safe haven" becomes increasingly valuable, as Reuters reporting has noted.
2. Countering Energy Transition Risks: Coal and LNG investments face regulatory and market risks from decarbonization. Gold, by contrast, is immune to these pressures and benefits from central bank demand, per the DiscoveryAlert analysis.
3. Capitalizing on Structural Demand: Central banks accounted for 40% of global gold demand in 2024, the Financial Post reported, with countries like India and Turkey accelerating purchases to diversify reserves.

The Path Forward

While coal and LNG remain significant in the short term, their declining trajectories suggest a long-term reallocation of capital. Investors should prioritize gold not only for its defensive qualities but also for its potential to outperform as central bank demand and inflationary pressures persist. Australia's position as the world's largest net gold exporter, the DiscoveryAlert analysis highlights, further cements its role in this transition.

In conclusion, the reordering of Australia's export hierarchy is a harbinger of broader shifts in global commodity markets. By increasing exposure to gold, investors can navigate the uncertainties of the 2020s with resilience and foresight.