Like any investment, there is a certain element of risk that comes with investing in gold. Although it is safer than many other investments, there is always the danger that either demand or value could fall, and there is often no definite way of knowing when it could rise again. Gold is thought of as a safe haven for many investors and many financial advisers recommend that you store a percentage of your wealth in gold – usually between 5 – 20%, however, you shouldn’t be misled by claims that gold is 100% risk-free.
Gold is renowned for being an excellent store of wealth. Essentially this means that it has the ability to hold its value over a long period of time, hence the reason why some people consider it to be risk-free. This reputation is based on centuries of performance results indicating that gold prices tend to go up in times of economic instability or political unrest.
But there’s a catch….
There is no guarantee that this will continue to be the case in the future, however, and there is always the chance that substitute investments for gold will become more popular. As a tangible asset, gold will always have some sort of physical value, but investors should be aware of the risks and be aware that it is not entirely risk-free.
A good example of the risks involved in gold investments can be perfectly demonstrated by what happened after gold prices hit a peak in 2011. Following the financial crisis in 2009, the value of gold went through the roof. In the Autumn of 2011, gold prices had reached nearly $2000 dollars an ounce, an increase of over $1000 in less than two years. Today gold prices have dropped to around $1,260 so if you’d bought gold at its peak value in 2011, you’d have made a considerable loss. It might be years, if at all before gold prices reach those sorts of heights again.
Storage risks
Like any other valuable commodity, gold needs to be stored securely in order to prevent theft or damage etc. If you’re storing the gold yourself then you need to ensure that it is properly stored in a safe or other suitable storage solution and that you are properly insured should anything happen to it.
Here’s the deal…
If your gold is being stored by a third party, then you need to make sure you know your rights with regards to ownership of the gold should the company fail or go bust. With an allocated gold account, the gold belongs to you even if the company responsible for storing it goes bust. However, you should always check whether the company are contractually obliged to lend your gold out to anyone. If your gold is stored in an unallocated vault and the company goes bust, then you wouldn’t have legal ownership of the gold as it doesn’t physically belong to you. You would instead only have legal rights as an unsecured creditor.
Gold Bars Stored in A Vault
Risks of scams
There’s a huge amount of gold dealers about these days, the vast majority of which are perfectly respectable, however, there is always the risk that you could be defrauded, particularly when purchasing gold from online sellers and on rogue websites. Before investing in gold, you should always make sure you shop around and get an idea of prices as well as carrying out your own market research. This way you can minimize the risks and avoid being ripped off.
YouTube is a great tool for investors seeking additional information about gold investments. There are literally thousands of videos out there, covering a wide range of topics, many of which can really help you get ahead with regards as to how to invest. Whether you’re looking for investment advice from some of the industry’s top leaders or helpful tips from other investors, there is always more you can learn in order to help maximize your returns.
Not sure where to start? Here are Physical Gold’s top 5 YouTube videos on gold investment:
5.Investing in Gold – How to invest in gold for beginners
This 4-minute video provides a basic introduction to gold investments and is aimed at new investors just starting out. It is informative, easy to listen to and offers a quick summary for beginners. It comes with recommendations on where to buy gold as well as advice on delivery and the potential risks associated with purchasing gold from sites like eBay. Whilst it doesn’t go into too much detail, it outlines some of the most important aspects of investing in gold.
Although this 7-minute video is from 2014, the topics of discussion are still relevant and address important factors about why gold is a worthwhile investment. Some of the issues discussed include global risk, uncertainty, economic crisis and climate change as well how all of these factors can affect the performance of gold.
3. Before you buy 1 ounce of gold or silver
In this 12-minute video, Mike Maloney discusses some of the scams associated with gold investing and what to look out for if you’re a new investor. Some of the topics for discussion include why it’s better to go with a reputable business and potential warning signs that a company is not 100% legitimate.
2. Where to buy & where not to buy gold
This 24-minute video informs viewers about gold purchasing options from a regular investor’s perspective. In the video, he discusses his experiences in buying precious metals and offers tips and advice on gold. He discusses the different ways of investing in gold as well as tips on holding it yourself. He also talks about over spot pricing and free gold kits.
Number 1 on our list is this 1-hour 20-minute video, which goes through the complete pros and cons of investing in gold & silver. In it, they talk about the federal reserve, fractional reserve banking and currency creation as well as gold accounts for an expanding currency supply.
Contact Physical Gold for more information
We hope you have enjoyed watching our top 5 videos and found the information useful and informative. For more information on gold investments, please speak to one of our experienced brokers by giving us a call on 020 7060 9992 or simply emailing info@www.physicalgold.com.
Futures contracts provide investors with a more flexible way to invest in precious metals without the need for investing the full amount up front. To buy or sell a futures contract, investors need not put up the whole value of the contract, but must instead pay a margin deposit as a show of good faith that they will make good on the contract.
How futures contracts work
Futures contracts are a contract for the future sale of an item specifying the date and place that the sale will take place. The contract will also address issues such as ownership and constructive possession of the gold, insurance details and the total sum of the margins.
The idea behind futures contracts is that it allows both consumers and producers of gold to manage gold price risk by locking in the price they wish to buy/sell that product for in the future. For investors, gold futures offer them the chance to invest in the future price of gold for only a fraction of the total cost of the contract. Most of the time, the futures contract isn’t actually settled financially as the contract is sold on before any physical gold changes hands.
Why invest in futures contracts?
Investors of futures contracts fall into two main categories. Hedger and speculator. Hedgers purchase gold futures as a hedge in order to against the price of gold going up or down whereas speculators hope to make money by taking advantage of favourable price movements in the market.
An example of a hedger might be someone who believes the price of gold will rise and wants to take out a futures contract to lock in a guaranteed price should prices indeed go up. This way they can offset any future price increases by selling the futures contract.
How else can you use futures?
A speculator, on the other hand, hopes to benefit from market volatility by gambling on potentially favourable price movements. For example, imagine you purchased a futures contract when gold prices were at their lowest and the value of gold suddenly shot up, you could then sell it on at a profit. Alternatively, if you thought gold prices were likely to go down, you could then sell your gold futures while their prices were still at a peak.
One of the main benefits of investing in gold futures as opposed to buying gold outright is that it requires considerably less capital. The higher amount of financial leverage afforded by gold futures also provides a higher risk/higher return investment.
The disadvantage of futures contracts versus physical gold purchases, however is the risk that you could lose greater sums of money if the price of gold moves quickly in the opposite direction to your futures bet.
Gold Futures Offer an Alternative To Physical Gold
Long/short positions & gold options
When investing in gold futures you have the option to take up either a long position or short position.
Short position
If you think the price of gold is likely to go down, then you might take up a short position on futures contracts. In which case you would pay a margin price to take temporary ownership of the stock and sell them straight on. If the price of gold then goes down, you can then buy the gold back at a profit before returning the stock to the original seller, having made a profit. The main risk of taking out a short position is that if the market doesn’t go the way you predicted you will still have to return the gold even if you have made a loss on it.
Long position
If you think the price of gold is likely to go up, then you would then opt for a long position on futures contracts. This is where you would take full ownership of the stock and hold on to it in the hope that gold prices go up over time.
Gold options
Gold options are slightly different to futures contracts. An options contract allows an investor to make a bet on whether the price of gold will go up or down in the future. On reaching the date specified in the contract, they will then have made a profit or loss based on the difference between where the price actually finishes and how much they’ve predicted it to go up or down by.
Here’s the deal…..
Options contracts are divided into two classes, either calls or puts. If you think gold prices will go up, you would purchase Gold call options. If you believe that gold prices will fall then can buy gold put options instead.
Overall options are a higher risk investment than buying physical gold as you could lose all the money you have invested if the market turns against you.
Discover more about the gold investment market with Physical Gold
Physical Gold are specialist brokers in gold and silver. We offer a wide range of gold based investments as well as providing additional insight into the industry and all the latest news and tips on investing. (See our insights page) For more information please contact one of our friendly and helpful advisers on 020 7060 9992.
China is one of the largest buyers of gold bars and coins in the world. A global report on gold consumption released by the World Gold Council for Q3 2017 found that China set the record for the highest demand for gold bars and coins, up by 57% to 64.3 tonnes. The report found that Chinese investors invested heavily in gold, due to fears about the falling price of the Yuan, Chinas national currency. In addition to this, there were other factors such as rising inflation, restrictions on the real estate market imposed by the government and the Chinese governments ban on Bitcoin exchanges across the country. As there were fewer investment options available to Chinese investors, the logical conclusion was to invest money in gold in order to hedge risks.
The year of the dog 2018
The Chinese zodiac plays an important role in investment decisions made by gold investors in the country. 2018 is the year of the dog and there are lucky days like the 7th and 28th of every Chinese lunar month. Lucky numbers included combinations of the integers 3, 4 and 9. Lucky months were the 6th, 10th and 12th month of the Chinese lunar calendar. Studies found that people born in the year of the dog along with the gold element made them attractive to members of the opposite sex. According to Chinese astrology, the yellow metal has influences on people born in the year of the dog. When gold is worn by these people, it is said to make them firm in their convictions, with high principles, noble and charitable. Previous years of the dog since the 1970s were 1970, 1982, 1994 and 2006.
The Chinese zodiac is a powerful influence on gold buyers in China
Year of the dog gold coin issues
The Australian Gold Lunar Series 2 Year of the Dog coins are available in 1oz, 1/4 oz. and 1/10 oz. These are a great series of coins issued by the Perth Mint with 99.9% pure gold. The 2016 Year of the Monkey gold 1oz. coins enjoyed immense popularity and are currently priced at £1,035. The Australian issue for 2018 also features a one-kilo coin made of 99.9% pure gold, the largest and heaviest coin in the series. The coins feature a portrait of Queen Elizabeth II on the obverse and a lovely Labrador retriever dog on the reverse. The coins were designed by Ing Ing Jong at the Perth Mint and are legal tender across Australia.
Not to be left behind in the race to commemorate the Year of the Dog from the Chinese Zodiac, the UKs Royal Mint has also issued their design of the 1oz. gold bullion coin. The coins are VAT free for investors across Europe, as well as CGT (Capital Gains Tax) exempt in the UK. The Royal Mint has created a series called the Shengxiao Collection and this coin is the fifth lunar design to feature in that collection.
The Canadian Mint has also issued a limited edition gold coin to commemorate the Chinese Year of the Dog. The coins have a face value of 150 CAD, made with 18-carat gold and weighs 11.84g. The edition is limited to 1500 coins worldwide. It is the 9th coin in the lunar series issued by the Canadian Mint.
Call us to invest in Chinese Zodiac gold coins
Our team of experts at Physical Gold are always available to advise you on buying gold bullion. Call us on 020 7060 9992 or get in touch via email before investing in gold coins. We deal in collectible gold coins and may be able to procure specific gold coins for your collection. One of our advisors can guide you through the process of investing in gold and help you make an informed decision before you invest your hard-earned money.
Image Credit: Flickr
Goodbye 2017
With 2017 about to finish, the time is right to reflect on the performance of gold and silver through 2017. It is important to take this into account before we look at any predictions for the New Year. In order to assess the performance of gold and silver, and indeed analyse gold versus silver, we should take into account the spread between gold and silver. The spread is currently 78: 1. This means it takes 78 ounces of silver to buy one ounce of gold. When we analyse the recent performance of gold versus silver, we realise that this gap is widening. In the past year, gold has risen 10.48% (YTD), while silver has fallen -1.08%.
While silver has suffered more volatility in the past few months, the spot price of gold has risen steadily through the year to peak at almost $1350 an ounce in September. Since that peak, it has settled down to almost $1250 as we draw close to the end of the year.
Analysts believe that we could be on the verge of another macro-economic slump as geopolitical events around the world cause uncertainty in the global markets. There are fears that the euro and the pound could both slump, causing instability across the region. The pound is likely to suffer on the back of Brexit uncertainty, while political upheaval in Germany and a looming election possibility is causing uncertainty for investors when it comes to Europe’s economic stability.
Added to the mix is the threat of global terrorism and a deepening political crisis between North Korea and the US. All of these factors could start 2018 off on a shaky start, causing investors to withdraw from global markets and seek safer havens in gold and silver. Gold forecasts are looking positive as we move into a New Year and analysts are bullish on gold.
2018 is looking upbeat for gold and silver as investors may switch to precious metals
Fear may trigger the move to precious metals
Analysts from the global investment bank, Goldman Sachs released a report in November 2017 warning investors about the ‘unsustainable’ levels of US debt in the coming years. The US needs to put the brakes on its budget deficit in order to avoid going back to the debt ceiling crisis of 2011. However, if the US budget deficit increases in 2018, it could weaken the dollar, triggering an exodus of investors to precious metals as we witnessed in 2011.
The only big negative for precious metals is the Bitcoin Bull Run. If this trend continues in 2018, it would divert investments away from precious metals. However, the regulatory environment for crypto-currencies is looking murky as regulators around the world have started clamping down. China has officially banned Bitcoin exchanges and the Indian government has launched an investigation into the sources of money being used to fund Bitcoin trades. Speculation is rife in the market that India may soon follow suit and ban Bitcoin exchanges.
Talk to our experts if you want to invest in precious metals
2018 could start on a positive note for both gold and silver. However, in order to make well-informed decisions about how and when to invest in gold or silver, talk to our experts. At Physical Gold, we have been advising investors on investing in precious metals for years and our experts will be happy to help you out. Call us on 020 7060 9992 and get the right advice before you invest your money.
Precious metals as an investment category have always attracted investors seeking to park their money in an asset class that behaves stably and does not have volatile highs and lows. Gold and silver are hot favourites for investors seeking to hedge their risks, find a safe haven and identify a stable asset class worthy of investment during periods of uncertainty in global stock markets.
The 2008 global economic crisis
A classic example is the period from 2008 to 2011. Spot prices of gold started rising from $870 in 2008. It continued to rise, finally reaching a record peak price of $1,895 on the 5th of September, 2011. This meteoric rise was fuelled by a number of factors.
The Eurozone crisis was clearly one of the factors that led to that rally in gold. A number of European countries defaulted on their national debt, starting with Greece. In quick succession, Portugal, Italy, Ireland and Spain joined the ranks. The spiralling debt crisis led global investors to believe that the entire European economy could be headed for a collapse. So, they hedged their risk by moving their money to precious metals. Similarly, during the 2011 debt ceiling crisis in the US, investors lost confidence in the American economy and turned to gold.
Precious metals are often chosen by investors looking for a safe investment option
2018 and beyond
According to research conducted by Citi, gold prices were likely to rally into 2018 and beyond on the back of the current geopolitical crisis. These include military attacks, the threat of global terrorism and the political situation in North Korea. Citi analysts predicted that the spot prices of gold will rise upward of $1400 an ounce and remain there until 2020. The analysts believed that a global macro-economic crisis will be an outcome of the geopolitical crisis and investors will move to gold or silver. A rise in the prices of silver in 2018 was expected due to economic and geopolitical uncertainty, but also higher demand coming from the industrial sector.
2020 and the global pandemic
Despite studies conducted by the market pundits and precious metals experts, no one could predict the real impact of the 2020 global pandemic, which significantly boosted precious metal prices. The COVID 19 pandemic, which unfolded in early 2020 and accelerated quickly through the year, plunged the world into yet another economic crisis of epic proportions. Many of the leading economies around the world bore the brunt of lockdowns, shutting down of many businesses throughout the country. This resulted in complete economic uncertainty, falling interest rates and rising unemployment.
Many investors moved to precious metals during this period to protect their wealth against the impact of the pandemic. As a result, precious metal prices rose, and gold achieved its all-time high of US$ 2048.15 per ounce on 5 August 2020. Silver prices also rose to a seven-year high of US dollar $22.90 per ounce in July 2020. Although industrial demand for precious metals fell during the lockdown, so did production. Latin American nations like Mexico and Peru are responsible for approximately 2/5 of global silver production, however, mine shutdowns created scarcity for silver. Due to the overall escalation of precious metal prices, the gold-silver ratio also fell to 70:1.
So, if you’re interested in buying gold or silver as a hedge, or an investment or purely to diversify your asset base by adding a safe haven, it’s probably time to think and act upon it now. It’s also interesting to note that the historic COMEX spot price curves of gold and silver are almost identical. This means that gold and silver enjoy heightened demand at similar intervals. However, it’s important to note that the price ratio of gold to silver is 78:1. This means silver is more affordable and is often a precious metal of choice for investment portfolios.
Talk to our experts for advice on buying precious metals
At Physical Gold, our combined expertise over several years makes us an ideal choice for you to discuss how precious metals can be an important asset class in meeting your investment goals. You can reach us at 020 7060 9992.
We can help you purchase precious metals directly from our website. Our experts are always happy to advise you on what to buy and then walk you through the process of placing your order online. It’s simple and hassle free and we will fulfil your online order quickly, making it one of the easiest methods to directly acquire precious metals.
The World Gold Council (WGC) is an international organisation comprising several of the largest gold mining companies in the world including Barrick, China Gold and Newmont Mining Corporation. The main aim of the council is to further develop and maintain the continual growth of the gold industry through extensive promotion, as well as supporting research into new uses for gold.
A brief background and insight into the World Gold Council
The WGC was first established in 1878 and over the last century it has had a huge hand in making the gold industry what it is today. Bringing together many of the world’s most prestigious gold-mining companies, it was originally founded to help promote the global demand for gold and fuel consumer interest.
According to its website, the WGC is governed by a Board of Directors, who meet four times a year. The board is made up of four main committees, who together help shape the future of the gold industry around the world. The organization have several main offices based all over the globe including their main headquarters in London as well as central offices in New York and Shanghai.
Through their website, the WGC provide investors with a wide array of useful data and information including reports on the latest gold trends, consumer behaviour, real-time gold stock performance updates and an extensive library of interesting articles.
Responsible gold mining
Responsible gold mining is high on the list of the WGC’s responsibilities and the organisation are heavily involved in ensuring responsible and ethical conduct throughout the mining industry. The WGC was instrumental in developing the Conflict-Free Gold Standard, a process put in place to make sure that any gold being mined does not go towards funding any global conflicts or unlawful militia activity. They also support the International Cyanide Management Code which provides a framework for helping to reduce the amount of potentially harmful environmental impacts caused by mining.
Gold Bar
Interesting facts about the World Gold Council
The World Gold Council’s symbol is made up of three gold rings. These rings are said to represent the “never ending circle of meaning,” and according to the council themselves are a reflection on how gold represented eternity to many ancient cultures. In the words of the WGC these three rings symbolize the past, present, and future of gold.
The WGC was responsible for creating the very first Gold Exchange Traded Fund (ETF) Launched in November 2004,the SPDR Gold Trust totally changed the way modern consumers invest in gold. The WGC initially spent just $14 million dollars developing the fund, which today is officially the 14th largest ETF in the world and has an estimated worth of $56.7 billion. The SPDR Gold Trust, ticker name GLD, is essentially a gold-backed exchange traded fund allowing investors to invest in gold bullion without the expense of paying premiums or storage costs. The GLD buys $30 million of gold daily and is the world’s largest private owner of bullion.
The WGC also helped set up the very first Gold Accumulation Plan (GAP) in China, along with the ICBC. (Industrial and Commercial Bank of China) The GAP is aimed at investors who want to invest a certain amount into gold on a daily basis. The benefit of investing in a GAP as opposed to a gold savings account is that it has a much lower minimum entry level, only requiring an investment of 1 gram per day. When the contract reaches maturity, investors can either renew it, convert it into cash, or exchange it for physical gold at designated branches owned by the ICBC.
2017 has been another fascinating year for the gold industry. This shiny precious metal captures the imagination quite unlike any other commodity on earth and was never far away from the headlines.
1) Piano tuner discovers Britain’s largest ever hoard of coins
Back in April this year, news broke that the largest ever hoard of gold in British history had been discovered stashed in an antique school piano. The find has an estimated worth of £500,000 and contained over 913 sovereigns minted during the reigns of Queen Victoria, Edward VII and George V. Proceeds of the find were split between the piano tuner that found them and the piano’s current owners, Bishop’s Castle Community College, Shropshire.
Gold demand has generally been fairly languid across much of Europe in the last year but statistics published from a money metal article back in August showed that German and UK demand for gold ETF’s has risen dramatically in the last year and a half. Figures show that between Q1 in 2016 and Q2 in 2017 investment in German Xetra-Gold rose by 97 MT, whilst investment in U.K. Source Physical Gold rose by 38 MT. Investment in U.K. ETFS Physical Gold also rose by 31 MT.
This may be partly a reaction to Brexit and the fact that German citizens are worried about ongoing issues with the European Central Bank (ECB) with regards to money printing and bond purchases. There are also serious geopolitical concerns caused by the US imposing sanctions on Russian imports as a lot of Germany’s imports are from Russia.
3) London reveals how much gold is stored in its vaults
Data published by the London Bullion Market Association (LBMA) earlier this year revealed for the first time ever, exactly how much gold is being stored in Britain’s capital city. Figures published by the association revealed that around 7,500 tonnes of gold was held in London at the beginning of this year. This is the equivalent of 596,000 gold bars, or £227bn-worth of gold. 68% of London’s gold was held by the Bank of England who currently look after the UK’s gold reserves.
Gold Bullion in the vaults at the Bank of England.
4) Germany brings home gold early
A surprising development in Germany this year saw the country send shock waves through the gold market, as they announced plans to recall all the countries gold currently being stored abroad, back to Germany by 2020. This involved moving nearly 400 tons of gold, worth around 30 billion, from the US and Paris back to Germany. Why this sudden decision? Many believe it shows Germany’s current mistrust of the US whilst others believe Germany may need it to back a new Deutsche mark, should the eurozone break up.
5) Global gold mining output in decline
We are still a long way off from running out of global gold reserves, but a new report by the GFMS team at Thomson Reuters this year revealed that total global gold production in 2016 fell for the first time since 2008. In total the world gold mine supply has fallen by 22 tonnes (3%) since 2015.
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At Physical Gold, we pride ourselves on bringing you the latest gold industry news from the UK and around the world. To speak to one of our advisers about potential investment advice please call us on 020 7060 9992.
The market for precious metals has underperformed throughout 2017. Big things were expected from gold and silver this year and despite performing strongly early on, they didn’t reach the heights that were expected. Both gold and silver have picked up recently but overall it has been a relatively disappointing year for precious metals.
Metals expected to perform well in 2018
Palladium
Despite a relatively underwhelming year from most precious metals, one metal that has performed particularly well is Palladium. This year prices for Palladium overtook platinum for the first time since 2001. Of course, there are no guarantees that Palladium will continue to perform well next year, however there are a lot of good indications. For one, production of Palladium is said to be in decline, particularly in Russia who currently produce around 41% of the world’s supply. As it stands Palladium is roughly 15 times rarer than its sister metal platinum, and around 30 times rarer than Gold. Other than Russia other large producers of palladium include South Africa and Zimbabwe.
There has also been an increase in the demand for Palladium from the car industry. This is due to consumers switching from diesel back to petrol cars amid government emissions warnings. Palladium is primarily used in catalytic converters for petrol cars helping to turn toxic gases and fumes into less harmful pollutants. The increase in demand for palladium is likely to continue into 2018 and whilst the emergence of electric cars could be a potential threat to the Palladium industry, we are still a long way off seeing electric cars becoming a proper rival to petrol.
Raw Palladium
Silver
Silver has had an indifferent year throughout much of 2017, however a lot of experts are predicting big things for the precious silver metal market in 2018. Currently the price of silver is relatively low despite a massive increase in demand across many industries, particularly solar energy. Production of silver is also on the decline and many people are predicting a big rise in its value if demand continues to outweigh production.
Gold
Gold was expected to perform extremely well this year but so far this hasn’t really been the case. Despite prices rising early in the year, gold prices have stayed fairly stable. With Interest rates in the /US expected to rise, gold is likely to take a hit early on in 2018 but many experts predict the metal will come back strongly towards the latter half of 2018 with prices expected to rise considerably.
Geo-political tensions and their effect on the market for precious metals
In times of political uncertainty, prices for precious metals – particularly
gold and silver, often tend to rise. This is because people are keen to store their wealth in tangible assets in the event that there should be a drop in the market. When prices for both gold and silver rose in 2017 it was generally due to geopolitical tensions such as Trump’s Inauguration and elections in Europe.
Looking ahead to 2018 there are several potential issues that could continue to cause economic instability. Brexit negotiations are still on-going which could potentially cause political conflict in Europe, although most of the cards are already on the table at this stage. Trump’s administration however, could still prove to be very volatile. US relations with Iran and North Korea are also very much in the balance and should things escalate then the economy may be affected. With so many global conflicts of interest still in the balance, our experts at Physical Gold are predicting a strong year for precious metals in 2018 as people look to store their wealth outside of the traditional system.
Purchase gold and silver with Physical Gold
For more up-to-date information and news on the precious metal industry, please visit our blog. If you wish to speak to us about how to invest in gold and silver, please call us on 020 7060 9992.
Gold is mined in countries all over the world, but which countries currently produce the largest amount? Here are the top ten biggest producers of gold, ranked by the amount they produce each year in metric tons.
The world’s top gold producing countries
1: China – (455 metric tons)
Dominating the list of biggest gold producers in the world is China, with 455 Metric Tons of gold produced last year. This is the tenth year that they have been top of this list, however, the amount of mineable gold in China is said to be declining. Are China exhausting their gold reserves? With only 2000 MT of mineable gold left, they could potentially run out within the next 4-5 years. It would be interesting to see how the gold market was to react should China’s gold output begin to drop.
2: Australia – (270 metric tons)
With 270 MT of gold produced last year, Australia comes second on the list of biggest producers. The sale of Newcrest Mining was partly to blame for an 8 MT decline in production from the previous year. Australia has the biggest gold reserve in the world at 9,500 MT. They are currently mining steady rates of gold and are set to run out in approximately 35 years’ time.
3: Russia – (250 metric tons)
Russia plans on producing 400 MT of gold a year BY 2030. They currently have 8000 MT of gold reserves, the second largest in the world. With a country the size of Russia, there is little doubt that there is plenty more gold left to mine. Estimates predict that Russia have a minimum of 20 years of mining left.
4: United States – 209 (metric tons)
Production of gold in the US hit 209 MT last year, this is down from the previous year (214 MT) The decline in production, like Australia is also due to the sale of mines and mine closures in Nevada.
Vintage gold mine cart
5: Canada – 170 (metric tons)
Canada has seen a rise of 17 MT in 2016, up from the previous year. With the expansion of Canadian gold mines and the development of two brand new Nunavut mines in 2019, their gold output is set to rise. Canadian gold reserves are set to last for at least 14 years at the current rate of mining.
6: Peru – 150 (metric tons)
Peru also saw a rise in gold production during 2016 with a 4 MT increase on the previous year. Peru is ranked in the top three countries in the world in terms of Copper, Silver, Zinc and Tin production. Their economy is driven by mining. As the 6th largest miner of gold their reserves (2400 MT) are set to run out by 2033.
7: South Africa – 140 (metric tons)
Since the 1980’s South Africa’s gold reserves have dropped significantly, from the world’s biggest gold producer in 2007 to where they stand now, as only the 7th largest in the world. South Africa currently have the 3rd largest gold reserve in the world and at their current rate of mining, they still have another 42 years of production left.
8: Mexico – 125 (metric tons)
Maturing gold mines and production challenges have severely affected Mexico’s gold operations in recent times. Mexico’s gold reserves currently stand at 1400 MT and if they carry on mining at this rate, they are set to run out of gold in approximately 11 years.
9: Uzbekistan – 100 (metric tons)
With a decline of 2 MT in gold output last year, Uzbekistan produced less gold in 2016 than the year previously. The country mined a total of 100 MT during 2016 and have a reserve of 1700 MT, which is 1300 less than Indonesia, positioned at number 10 on this list. Uzbekistan has an estimated 17 years of mining left in them.
10: Indonesia – 100 (metric tons)
Indonesia has increased its production of gold by 3 MT on last year, which ties them with Uzbekistan in terms of total gold produced. One factor that could potentially affect this year’s out- put however, is the long-running dispute between the owner of the Grasberg mine, Indonesia’s largest gold mine and the Indonesian government.
Raw, unprocessed gold
Other nations such as Brazil, Papua New Guinea, Ghana, Columbia and Kazakhstan also contribute to the global output of Gold. The companies that produce the most gold include: Barrick Gold, Newmont Mining, AngloGold Ashanti, Goldcorp and Kinross Gold.
Could we potentially run out of gold?
As gold reserves decline, the gold market
will be forced to adapt as it becomes more expensive for mines to continue exploring for new gold. A need for costly new equipment and materials adding to the expense. Failure to adapt has already led to South Africa falling from its spot as the largest producer of gold in the world to only 7th in just over a decade. With the increased risk of mining gold, mining companies are forced to try and raise their profit margins in order to offset the risk. Currently the world has an estimated gold reserve of 57,000 MT. With 3,100 MT mined in 2016 mineable gold could potentially run out in the next 18-20 years, should no new sources be discovered.
Physical Gold is a UK dealer of Gold and Silver and offers products including Pension Gold,Tax Free Gold and Silver Coins. As a trusted dealer we will advise you on all the options available to you and your investment will also come with a high-level security storage service along with insurance provided by Lloyds of London. Expand your portfolio today. Call for expert advice on 02070 609 992 or email info@www.physicalgold.com.
Live Gold Spot Price in Sterling.
Gold is one of the densest of all metals. It is a good conductor of heat and electricity. It is also soft and the most malleable and ductile of the elements; an ounce (31.1 grams; gold is weighed in troy ounces) can be beaten out to 187 square feet (about 17 square metres) in extremely thin sheets called gold leaf.
Silver Information
Live Silver Spot Price in Sterling.
Silver (Ag), chemical element, a white lustrous metal valued for its decorative beauty and electrical conductivity. Silver is located in Group 11 (Ib) and Period 5 of the periodic table, between copper (Period 4) and gold (Period 6), and its physical and chemical properties are intermediate between those two metals.
had a huge hand in making the gold industry what it is today. Bringing together many of the world’s most prestigious gold-mining companies, it was originally founded to help promote the global demand for gold and fuel consumer interest.
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