The Australian dollar has recovered against the U.S. dollar, buoyed by strong demand for the metal from Asian investors.
The dollar fell 0.7 per cent against the greenback to 89.97 Australian cents, the lowest since mid-February.
Gold has been a strong performer in Australia, with a gain of more than $1 billion since February to $1,845.2 million at the end of last month.
The gains were mainly fuelled by strong mining activity in the gold-rich Helderberg and Norway mountain ranges.
Australia’s gold reserves fell in the third quarter to $842.5 million, while its silver reserves were up $5.9 million to 2.8 billion ounces.
The silver reserves rose $7.9 billion to 1.5 billion ounces, according to Statistics New South Wales.
The Australian economy is growing strongly and mining investment is increasing, with investment in mines, power generation and manufacturing.
“While gold mining is not a major driver of our growth, we continue to see robust investment and mining activity driven by the strong Australian economy,” Reserve Bank governor Mark Carney said in a statement.
“This will continue to underpin our continued strong growth and economic recovery.”
Australia’s economy grew by 2.1 per cent in the last quarter, the fastest pace in five years.
But growth is expected to slow to 1 per cent this year and next, and there has been concern over the impact of the carbon tax on the economy.
Australia is also in the middle of a mining tax.
The carbon tax is expected in 2019 and has been criticised by some economists as a tax that will harm the economy because it will reduce the amount of revenue to pay for infrastructure and other spending.