Gold Business Information

About Gold

| Characteristics of Gold | Supply and Demand for Gold | Gold's International Market and Gold Prices |
| Factors Influencing Gold Prices | Price Trends |

Supply and Demand for Gold

Demand for Gold

Demand for gold can be broadly classified into fabrication demand and investment demand. Fabrication demand for gold is in turn divided into jewelry goods, electronics, dentistry, medals, coins, and other sectors. Jewelry accounts for a large portion of fabricated goods. Investment demand refers to gold held by central banks and individuals as financial assets such as coins. Total demand in 2009 rose 8.3%

The reason for this is that global investment in gold jumped by more than 900 tons, outweighing the decline of around 500 tons in fabrication demand. Implied net investment showed remarkable growth of 333 percent, reaching 1,429 tons, a response to the massive inflow of funds into ETFs in the first quarter and later the inflow of funds into Comex.

In contrast, bar hoarding fell by 52% to 187 tons, largely because of a substantial decrease in East Asia, the Middle East, and the Indian subcontinent. Jewelry demand contracted about 20 percent to 1,759 tons, the result of a rise in gold prices and the impact of the economic crisis. Also, producer dehedging rose to 254 tons with Barrick’s buyback.

Source: Gold Survey 2009 (GFMS)

Supply for Gold

Gold supply for 2009 saw growth in mine production to 2,572 tons, which is growth of 7 percent, or 163 tons, and a sharp 27 percent rise in old gold scrap to a record level of 1,674 tons. Net official sector sales came to only 41 tons, representing a large drop of 82 percent, but, total supply grew by 330 tons.

Last year’s increase in mine production on a tonnage basis is the second largest in history, after the record in 1988.

A breakdown of total supply shows 324.0 tons for China, 222.8 tons for Australia, 219.8 tons for South Africa, and 219.2 tons for the United States. By region, China, which stays on top, and Asia centering on Indonesia recorded sharp increases in gold production. Production growth was also seen in South America, where new mining projects began operation.
In total, few countries experienced sharp declines in gold production; the United States and South Africa, which had the largest declines in output, both saw output decline just over 10 tons.

Source: Gold Survey 2009 (GFMS)