Why is the production of gold so important? What are the trends and the economic influences that drive production and also price? To understand the first question we have to understand the demands for gold. Gold has commercial demand that it is fashioned into jewelry but also a financial demand as it is used to manage risk in financial portfolios and to protect the wealth of many. It also has peripheral uses in technologies such as the smartphone.
What Parts Of The World Does Gold Come From?
So now we understand the demands and the values of gold it is easy to see that it is a commodity that will continually be wanted. The supply of gold is therefore of paramount importance and we will discuss the factors, areas and influences that contribute to the supply. Gold production is spread all over the world with China being the largest producer at 15% and Asia as a whole produces 22% of the world’s total production. Central and South America account for 17% with North America contributing 15%. Africa produces 20% and the former Soviet Union C.I.S region 14%. Amazingly, gold recycling accounts for one third of the total production.
These figures really only point out the geographical areas that gold is produced, it is not until we analyze the increases and decreases in production can meaningful data be produced.
What Countries Produce The Most Gold?
In 1990 the Chinese Government passed laws making it easier to buy gold. As a result, demand rose, as did investment in bars and coins. Today, China produces 455 metric tons of gold every year, according to the US Geological Survey. Another factor that may be responsible for the demand of gold is the growth of wealth in China. Since 1980 an increase of 20% of the population of China chose to live in urban areas. As the wealth per capita increased so did the demand for gold.
But let us take South Africa as an example why gold production might decline. In 1990 South Africa produced close to 350 metric tons of gold. Today, it produces around 140 metric tons. Part of the reason for this decline was the reduction of gold deposits in the country. Factor into this the rising electrical costs for mining and the decline in the value of gold in South Africa. The gold mines had to work harder to produce the precious mineral and the costs for mining in terms of wages and utilities rose sharply. There was a neglect from the government in investment and private corporations had to find high-end forms of technology to find gold deposits, thus production declined rapidly.
These two examples of success and failure show how many external forces drive the production of gold. It is clear that it is not merely a simple supply and demand issue, but is actually much more complex. Many factors drive the production and the cost of gold and every case has to be analyzed independently to fully understand the nuances of the world’s gold production.
Top 14 Gold Producing Countries In The World
- View information as a:
|Rank||Country||Metric Tons of Gold Production|
|13||Papua New Guinea||65.00|