The gold trail: origins and destination

While South Africa was by far the number one gold producing country in 1970 with over 1,000 tons, followed by Russia with some 200 tons, the picture has fundamentally changed in recent decades. Since 2007, China has been the leading gold mining country, following a comet-like rise: in 1970, China extracted just 1.5 tonnes of gold; in 2014, however, the country was able to produce 450 tons, further expanding its lead over the other top mining countries Australia (250 tons), Russia (245 tons), USA (211 tons) and South Africa (150 tons). The total extracted amount of gold reached an absolute peak in 2014 with 3,133 tons, surpassing even the former record level of 3,022 tons in 2103. Just for comparison: In 1980, barely 1,231 tons were produced worldwide. However, since 2012, no new gold deposits have been discovered worldwide, and experts predict that gold deposits will be entirely exhausted with today's extraction methods by 2032 at the latest. However, besides gold mining there will always be gold recycling, amounting to 1,125 tons in 2014, and contributing some 26 per cent to the overall gold supply − a lower share than in 2013, when it stood at 30 per cent. The utilization of the gold supply has also proven quite dynamic, if less volatile: in 2014, the bulk of the gold supply was still used for jewellery making, with a share reduced from 54 per cent in 2013 down to 51 per cent. Despite an increased delivery rate, Gold as an investment − in bullion or gold coins − again increased in 2014 by 4 per cent, compared to the prior year, to a full 25 per cent. The industrial use of gold remained virtually the same in 2014, at 9 per cent, while the use of gold to increase state reserves rose to 11 percent, with 10 percent in 2013.

Given the relatively stable demand for gold, the anticipated shortage of output alone will ensure that gold will remain a much sought-after precious metal in the future.

Arnulf Hinkel
Financial journalist