Gold Supply and Demand

Content courtesy of West Timmins Mining Inc.

Global gold production peaked in 1999 at just over 2,600 tonnes, having risen steadily from a 1980 base of about 1300 tonnes. In 2002, global gold production was running at just under 2,600 tonnes per annum,   It is considered that lack of exploration expenditure in the 1990s, coupled with the inherent delays between discovery and production, mean the gold supply will remain inelastic and is likely to reduce slowly over the coming few years.

The geographical breakdown of major global producers (in tonnes) is as follows :

Source : http://www.goldsheetlinks.com/goldhist.htm

Gold – Demand

Gold’s demand runs at about 3800 tonnes per year - notably faster than it is being mined (2,600 tonnes).

Gold demand is much harder to evaluate than production, because while production is concentrated in a relatively small number of mines, demand is distributed throughout the world. This makes it difficult to build a statistically accurate picture. Some of the difficulties have to do with the fact many gold buyers are deliberately secretive.

It is safe to say the major demand comes from jewelry manufacture [2,727 tonnes in 2002 [source]]. The other main demand comes from retail investment - i.e. from gold's use as a private reserve asset [340 tonnes in 2002]. The amount used in industry, e.g. in electronics and dental surgery, amounts to a further 340 tonnes.

The following table summarizes six years of global gold demand [tonnes] by usage :

The geographical breakdown of demand illustrates its jewelry-based nature.  Because of its importance in Indian marriage ceremonies, India leads the table.  The USA is second because of the broad affordability of gold jewelry for a large section of the world's richest society.

Geographical breakdown of the world's gold consumers:

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