Figure of the month: 49 per cent
04.07.2019 - News
created by Arnulf Hinkel, Financial journalist
Would you have guessed? Although the lion's share of both mined and recycled gold is used for investment purposes, it is in a different form than you might expect. Almost half of today’s gold production is used to produce jewellery and gold watches. For example, a total of 3,346.9 tonnes* of gold was mined and a further 1,172.6 tonnes recycled in 2018, of which around 2,200 tonnes went directly into the production of jewellery.
When it comes to gold investments, regional mentalities differ greatly
The massive demand for gold jewellery largely stems from current and former emerging markets. More than half of the gold jewellery produced in 2018 was purchased in China (672.5 tonnes) and in India (598 tonnes). In India, the high demand for the precious metal is rooted in traditions going back thousands of years. Especially in the wedding season, gold jewellery is bought and gifted in quantities unequalled by any other nation. In India and the entire Asian region, it is generally seen as a sensible investment and favoured above bullions or gold coins. Accordingly, Chinese demand for gold bars and coins in 2018 stood at a mere 304.2 tonnes and was even lower in India at 162.4 tonnes.
Gold seen primarily as an investment in industrial nations
In Europe and the US, gold investments are usually made in bullions, coins or securities. Of all the gold mined and recycled in 2018, 1,090.2 tonnes were used for gold bar and coin production; a further 68.9 tonnes went into the physical backing of gold-based ETFs. The latter has gained significant importance over just 15 years: while only 41 tonnes of gold served as collateral for gold-based ETFs at the end of 2003, by late 2018 the holdings had risen to 2,440.4 tonnes worldwide. Meanwhile, gold holdings of Xetra-Gold, Europe's leading gold-backed ETC, have increased to almost 194 tonnes.
*All data obtained from official publications of the World Gold Council.
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