51. What does the supply and demand of gold consist of (The Golden Tree)
In the Golden Tree it becomes clearly visible where the gold comes from and where the gold goes. Unfortunately, we cannot escape a relatively technical story, but the figures do give us a clear insight into this.
| Top 7 (Gold Mining Countries) | Weight (in tonnes) |
|---|---|
| China | 83,2 |
| South Africa | 35,6 |
| Peru | 29,5 |
| United States | 34,8 |
| Indonesia | 32 |
| Australia | 27,2 |
| Uzbekistan | 25,6 |
Sources of gold:
It is estimated that 50,000 tonnes of gold are currently known from underground reserves that have been located. Of this, about 2,500 tonnes of gold is mined annually.
This underground reserve is greatest in:
- Australia (7,300 tonnes)
- South Africa (6,000 tonnes)
- Russia (5,000 tonnes)
China has a localized reserve of 1,900 tons. It is striking that China is the country that mines the most gold per year, this is more than 83 tons per year. South Africa comes in second place with 35.6 tonnes. This is less than half of China, which has a localized gold reserve of more than three times that of South Africa. In Europe, Russia is by far the largest player in the mining of gold (20 tonnes). This is followed by Kazakhstan with 2.5 tonnes per year.
Approximately 1,650 tonnes of gold are recycled every year. In this process, gold is melted down and used for other purposes. A large part of this consists of old jewelry. Due to the high price of gold, a lot of old jewelry is sold and melted down. This molten gold can be used to make ingots or granules, which can be used in the production process.
Uses of Gold:
In total, it is estimated that a total of 166,600 tons of gold has currently been mined. It is very difficult to estimate how much gold is currently still in circulation, but due to its sustainable nature and its value, it is expected that not much gold has been 'lost'.
Technology:
| Technology: | (percentage) |
|---|---|
| Electronics | 70% |
| Dentistry industry | 10% |
| Other industries | 20% |
In contrast to silver, gold is used relatively little in the production process. We can assume about 12%. The gold is used in very small quantities, such as in telephones. This makes the recycling of gold incorporated into the technology an intensive and expensive activity, making it unprofitable in many cases.
| Investments/Central Banks: | (percentage) |
|---|---|
| Gold bars | 78% |
| Official Gold Coins | 16% |
| Collectible and commemorative coins | 6% |
Investment:
About 35% of gold is used for investment, of which 17% is held by Central banks. For the Central Banks, a big difference can be seen in the amount of gold they hold as a reserve for their total debt. Remarkably, the Central Banks of Portugal and Greece have one of the highest gold reserves (90.5% and 81.5% respectively). The Dutch Central Bank has a gold reserve of almost 60% (612.5 tonnes). The United States has the largest amount of gold reserves of 8,133.5 tonnes (74.5%). China comes in at the 6e 1,054.1 tonnes, which is remarkably only 1.6% of the total outside capital.
Jewelry:
At the moment, it is expected that more than half (51%) of the gold is used in jewellery. The largest market for this is India. In 2010, there was an estimated 746 tonnes of gold jewellery in India. The fastest growing market is the Chinese market. In 2010, they were responsible for an estimated 400 tons of gold jewelry. While most Dutch jewelry is 14 carats, in China more than 80% of the gold jewelry is made of 24 carat gold.
Sources:
World Gold Council
Trustable Gold
