Gold Supply and Demand

Gold Price

Gold is considered a hedge against inflation and economic uncertainty. During times of high inflation or economic uncertainty, investment demand for gold increases, and subsequently, the gold price generally rises. Gold is no longer monetized by most countries via a gold standard.


Gold Production History

Gold production has risen from 2300 tonnes per year in 1994 to 3100 tonnes per year in 2016. This represents a 35% rise over 21 years. Since the global financial crisis in 2008, the production of gold has risen considerably from 2260 to 3100 tonnes in 2016, a rise of 37%.

Please note that the 2016 figure is an estimate.

    

Source: United States Geological Survey - Mineral Resource Program - Gold


Gold Production by Countries in 2016

These 2016 gold production figures by country are estimates. China is the largest producer and consumer of gold in the World. Comparing gold production from the top 10 producing countries between 2015 and 2016 it appears fairly steady. Indonesia has surpassed Ghana as the 10th largest gold producing country.

    

Source: United States Geological Survey - Mineral Resource Program - Mineral Commodity Summaries 2017 - Under Gold


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Gold Production by Companies in 2016

These 2016 gold production figures by company. Barrick Gold remains on top at 5.5 Moz. This is around 0.6 Moz higher than the number 2 producing company Newmont (at 4.9 Moz), and 1.9 Moz higher than number 3 producing AngloGold (at 3.6 Moz). All other companies produce less than 100 tonnes per annum. These figures illustrate that no one company producers a significant amount of the overall global gold production.

    

Source: Mining.com - World's top 10 gold producers


Gold Reserves by Country in 2016

The 2016 gold reserves are the reserves that are reported by countries to the International Monetary Fund (IMF). The United States has by far the largest gold reserves at around 8133 tonnes. This is followed by a distant second of 3377 tonnes by Germany. Interestingly the IMF still holds 2814 tonnes, after selling 200 tonnes of gold to India for US$6.7 billion in 2009. It is a widely held belief that China may be under reporting its official gold reserves to the IMF and therefore actual gold reserves maybe substantially higher. In 2015 China announced a 604 tonne increase in gold reserves, the first public disclosure since 2009.

    

Source 2016: World Gold Council - Gold Demand Trends Statistics - Full year 2016 - Table7.GDT


Gold Demand History

This chart shows what made up global gold demand from 2005 to 2016. Central banks were net sellers of gold from 2005 to 2009, and since 2010 have become net buyers. Technology use has fallen slightly during this time going from 440 tonnes in 2005 to under 400 tonnes in 2014. Bullion demand has grown to hit a high of 1765 tonnes in 2013, to pull back to 1064 tonnes in 2014, possibly as a result of falling gold prices. Exchange traded funds were net buyers of gold from 2005 to 2012, and became significant net sellers in 2013 and continued to be net sellers in 2014, however at a much slower pace. Lastly, jewelry demand has, on average, fallen during this period. In 2005 it was 2721 tonnes and by 2014 it had fallen to 2153 tonnes. It appears to be fairly steady around 2000 tonnes the last 6 years. This may be attributable to high gold prices and cut backs to discretionary spending on jewelry.

    

Source 2005: World Gold Council - Gold Demand Trends - Full year 2014 - Table 13: Historical data for gold demand

Source 2006 to 2015: World Gold Council - Gold Demand Trends - Full year 2015 - Table 13: Historical data for gold demand

Source 2016: World Gold Council - Gold Demand Trends Statistics - Full year 2016 - Table1.GDT