China closed in on becoming the world's leading gold producer in 2007, but trails nations including the United States, India and Canada in the international gold trade.
In early January 2008, gold prices approached US$900 per ounce. That’s triple the $300 an ounce that gold sold for in January 2000.
As world gold prices heat up, precious metal futures debuted on the Shanghai commodity exchange – one of the world’s richest and fastest-growing equity markets.
Loyal gold bugs predict per-ounce prices as high as $2,200. However, international trade consultants caution that higher gold prices don’t necessarily translate into heftier profits for countries that produce, export and import gold.
Top Gold Producers
According to Sherilee Bridge of Johannesburg’s Mail & Guardian Online, China is positioned to become the world’s largest gold producer for 2007.
South Africa has been the number one gold mining nation since the 1970s, a time when Johannesburg controlled two-thirds of global gold output. China moved three big gold mines into production during 2007, while many South African gold mines have reached maturity. Still, the race for gold bragging rights should be close, with both countries producing close to 260 tonnes of gold for the year.
Australia should be the third-highest gold producer in 2007, followed by the United States.
Top Gold Exporters
In 2005, the following nations exported the most gold by value.
- United States … US$5.5 billion (23.2% of top ten gold exporters, up 25.2% from 2004)
- Australia … $4.4 billion (18.6%, up 7.1%)
- Canada … $3.7 billion (15.5%, up 28.4%)
- Peru … $3.1 billion (12.9%, up 30.1%)
- Hong Kong … $2.8 billion (11.8%, down 55.9%)
- Japan … $1.4 billion (6%, up 17.8%)
- Germany … $841.7 million (3.5%, up 22.7%)
- Singapore … $764.8 million (3.2%, up 14.2%)
- Italy … $628.7 million (2.6%, up 41%)
- Colombia … $627.2 million (2.6%, up 9%).
Italy, Peru, America and Germany had the fastest increasing exports for gold in 2005. However, while higher gold prices in 2008 may lead to more demand for gold bullion and gold mining stock investments, gold exports may well decrease as global trade partners wait for gold prices to normalize.
Top Gold Importers
The following countries imported the most gold by value in 2005.
- India … US$10.9 billion (33.1% of top ten gold importers, up 6% from 2004)
- United States … $4.4 billion (13.5%, up 10.9%)
- Turkey … $3.9 billion (11.8%, up 11.4%)
- Italy … $3.5 billion (10.5%, down 2.8%)
- Canada … $2.3 billion (6.9%, up 60.1%)
- Australia … $2.1 billion (6.5%, up 18.5%)
- Thailand … $2 billion (6%, up 71.4%)
- Malaysia … $1.4 billion (4.1%, up 9.2%)
- Japan … $1.3 billion (4.1%, up 12.1%)
- Germany … $1.2 billion (3.5%, up 17.9%).
Thailand and Canada experienced the greatest percentage gain in gold imports during 2005. While India is a major destination for international gold shipments, record high gold prices are driving away Indian buyers.
Gold jewellery is an indispensable component of Indian marriages. With global gold prices this high, however, Indian consumers are refurbishing used jewellery instead of purchasing new golden adornments.
This in turn decreases India’s demand for gold imports, which in 2005 accounted for a third of global gold deliveries.
References
This article presents independent calculations and insights based on statistical data from the International Trade Center as well as the articles ‘China closes in on SA as world's top gold producer’ by Sherilee Bridge (Mail & Guardian Online on December 3, 2007) and ‘India Gold - Record prices douse demand, recycling up’ by Biman Mukherji (Reuters India on January 9, 2008).
