Gold Trading Boot Camp: How to Master the Basics and Become a Successful Commodities Investor

CHAPTER 43

Global Supply-and-Demand Fundamentals: The Mining Industry, Gold Consumption, Gold Holdings, and Central Banks

There is a great deal of material that I could not include in this book. Perhaps the most pertinent would be a discussion of the global mining fundamentals, particularly as they apply to producer hedging practices. Also, I have not provided a full examination of the specifics related to central bank sales. These are critical factors in any fundamental assessment of the precious metals sector. In this chapter, I provide a brief overview and urge you to do more research into global supply-and-demand statistics for gold. This information is available from the World Gold Council (www.gold.org), the International Monetary Fund, and Gold Fields Mineral Service (GFMS).

According to data provided by the World Gold Council (WGC) and by GFMS Ltd., global producers of gold include:

South Africa	12 percent (196 tonnes in 2005)
Australia	10 percent (263 tonnes in 2005)
United States	10 percent (262 tonnes in 2005)
Latin America (ex-Peru)	10 percent
Africa (ex S.A.)	9 percent
China	9 percent
Peru	8 percent
Russia	7 percent
Asia (ex-Indonesia)	7 percent
Indonesia	7 percent
Canada	5 percent
CIS (ex-Russia)	5 percent
Others	1 percent

 

According to the World Gold Council (WGC), 155,500 tonnes (metric tons) of gold have been mined over the course of history, two-thirds of that total since 1950.

Globalization of output has meant diversity in geopolitical risk. In fact, South Africa’s percentage of total ...