Exploring Gold Demand and Supply by Country

Exploring Gold Demand and Supply by Country

Exploring Gold Demand and Supply by Country

December 30, 2023 431 view(s)

Egypt buried monarchs in gold, and affluent people in Ancient Rome broadcast their wealth by displaying gold on their bodies. While you probably aren't going to entomb Aunt Sally in gold, you cannot deny this precious metal's investment value

Used as a medium of exchange since 4000 BC, the value of gold assets is dictated by the physical limitations of mining. Because of this, it doesn't lose monetary value like paper currency, stocks, and bonds.

Gold demand is high in many countries. Learn how production, war, and demand impact gold pricing.

Countries With the Highest Gold Demand


Usage is measured in tonnes; a tonne is a metric ton (MT) equal to 1,000 kilograms or 2,204.6 pounds. This differs from a ton, which is 1,016.047 kg or 2,240 lbs.

Countries mining gold don't always have a high demand for its use. The five countries below have the highest demand.

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China


China is the largest consumer of gold in the world. The high demand is due to their view of gold as a sound financial investment.

During the Six Dynasties, 222-589 AD, and the arrival of Buddhism, worshipers made gold offerings. They built gold pagodas and statues of Buddha, increasing demand.

Current gold supply use includes manufacturing, jewelry, and investments. They consume about 984 metric tonnes yearly and import about two-thirds of their gold.

Gold is presented to young family members on special occasions, which includes giving newborn babies tiny gold necklaces and bracelets. During the Chinese New Year, purchases of 24-carat gold jewelry featuring zodiac symbols are popular because of its beauty and investment value.

India


India's gold mining industry is small, so it imports most of the gold it uses. The country ranks second in the world for gold consumption.

Because of the increase in gold prices, speculation is that use in 2023 could drop to about 700 MT. The price increase encourages people to sell their older jewelry and gold coins. 

Thailand


Thailand uses about 90 MT of gold annually due to the demand for jewelry, including necklaces and other ornamental pieces. The demand increased by seven percent in the third quarter, predominately for gold bars and coins.

During the same period, gold jewelry's popularity fell due to price increases. The war in the Middle East is why the cost of gold exceeds $2,000 an ounce.

United Arab Emirates (UAE)


Following the pandemic and tourism's return, the gold price in the UAE increased. Usage rose by around 319% yearly, from 2.1 to 8.8 tonnes.

The current global economic downturn has reversed that trend, with jewelry sales dropping 15% in the third quarter of 2023. This has led to an overall year-to-date decrease of 19% or a demand of only 29 tonnes this year.

United States


In 2022, the United States experienced an annual gold demand increase of 18%, to a total of 4,741 tons, the highest annual demand since 2011. This increase was partly due to central bank purchases and retail investor buying. The demand for investment gold saw a ten percent increase to 1,107 tons.

The 2023 use of gold in the United States is decreasing because of the rise in gold prices. The U.S. does not make jewelry of pure gold, preferring a mix of gold and copper to create jewelry with a higher resistance to wear. This is why U.S. gold jewelry is sold in a carat, usually 10, 12, 14, 18, or 21 carats.

 

Top Gold Producing Countries


Before the 1890s, Australia, Russia, and the United States were the largest gold-producing countries in the world. The world's largest goldfields were discovered in South Africa's Witwatersrand Basin in 1886.

This gold rush led to the Boer defeat in the Second Boer War from 1899 to 1902. This resulted in the loss of Boer self-government and the establishment of British rule over South Africa. Britain's ultimate goal was to claim the gold fields for themselves.

By 1970, South Africa's production of gold peaked at 1,002 tonnes, the largest amount produced by any country in a year. As of 2023, Australia, China, and Russia are the top producers in the world. 

Australia and Russia have the largest reserves of gold. This means their mining resources are greater than in any other area.

Australia


Australia has the largest gold reserves, producing about 320 metric tons annually. The country is conducting further gold exploration due to a discovery of in situ gold nuggets in 2017 in a gold project in West Pilabara, Western Australia.

In situ gold nuggets, called lode deposits, consist of disseminating metallic gold in quartz veins. There are also traces of gold in sulfide minerals or very fine-grained particles in rocks.

Canada


If you visit the Yukon, you will find gold still being mined in Dawson City, home of the Klondike Gold Rush in 1896. The Country is the world's fifth-largest producer.

Ontario and Quebec are the leading provinces for gold production, providing over 70% of the country's gold output. Gold is its most valuable mined commodity.

British Columbia's Golden Triangle is home to some of the world's largest and richest metal deposits. The area was the site of gold rushes in 1861, 1870s, and 1898. A gold discovery in the early 1900s included additional precious metals-copper, gold, nickel, silver, and zinc.

Receding glaciers are making previously inaccessible deposits available for mining. The Premier Gold Mine, opened in 1918, is one of the world's best gold and silver mines.  There are 39 exploration and development projects taking place within the Golden Triangle.

 

China


The gold mines in China have been producing about 330 metric tons of gold per year for over a decade. They provide more than 10.5% of global production and are the top consumer of gold jewelry worldwide.

In addition to gold mining, China has major gold smelting companies and is considering opening additional sites in Africa and Asia, then shipping the raw gold to China for refinement.

Russia


Russia's gold production continues to increase yearly, from about 255 metric tons in 2017 to 320 MT in 2022. Their projected output is 400 MT by 2030. According to the U.S. Geological Survey, the gold reserves in Russia are about 6,800 MT, making them the second largest country for gold reserves.

Despite high production and reserves, their product isn't reaching world markets due to their invasion of Ukraine in February 2022. Suspensions from trading at the London Bullion Market Association (LBMA) have pushed Russian gold operations to seek alternative markets.

United States


In 2022, the U.S. gold production was around 170 MT and continues to drop.  US gold production is out of over 40 lode and placer mines in Alaska. There are also smaller placer mines in the western U.S.

The country has about 33,000 MT of gold in undiscovered and identified resources, and estimations are 3,000 MT in reserves.

U.S. citizens who own Sacagawea coins may be holding a valuable gold asset. Most of those produced are worth only $1. Those with a rare version have a gold mine worth $8,800 to $144,000 each. This shows how solid coin investing can be for portfolio growth.


Gold Price Influencers


Supply and demand are the two main factors impacting gold's price. Supply depends on mining production. As of February 2023, gold pricing was over $1,870 per ounce. 

Central banks hold their paper currency and gold reserves. As they transfer money into gold, the price of gold usually increases. Following the U.S. elimination of the old standard in 1971, global central banks purchased gold.

The global standard for gold pricing is the value of the U.S. dollar. A strong U.S. dollar keeps the price low; a weak U.S. dollar drives the price up. A buyer can purchase more gold with a weak U.S. dollar.

For this reason, inflation dramatically impacts the price of gold. The price of gold dropped during the 2022 inflation surge.

Worldwide demand for gold jewelry, plus the need for technology and industrial use, increases the value of gold. The price will increase if there is a high demand for consumer products, like jewelry.

Wars also impact the global gold market.  The attack on Israel by Hamas increased the value of gold by nine percent and silver by 10.25%. Russia's inability to export gold because of its war against Ukraine drives the price up due to a decrease in supply.

 

BRICS


A global powerhouse influencing the world economy are the countries of Brazil, Russia, India, China, and South Africa (BRICS). They are considering the development of a BRICS currency. This may impact the worldwide value of the U.S. dollar, causing a decline in its exchange rate and purchasing power.

If BRICS currency uses gold as its standard, it may be preferred over U.S. currency, which no longer utilizes the gold standard. This could turbo-charge the cost of gold.

There is no way to predict the impact of such a development on the worldwide economy. Gold is a physical asset that has consistently held value throughout history. It is a solid investment that will maintain good standing throughout financial downturns, economic crises, and political turmoil.

The World Bank's precious metals index is seeing strong demand for increasing the prices of other precious metals, including silver and platinum. 

Is Gold Worth Investing In?


Gold investing is available in bars, coins, and jewelry. Gold demand is influenced by various factors, including inflation, war, and the ability to ship freshly mined products to consumers. As a physical asset, gold retains its value, making it a solid investment. 

We invite you to check out the new products available at the US Gold Bureau, then contact us to learn more about meeting financial goals by investing in the precious metals market.

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