Gold is the most malleable metal. It is dense, soft and ductile and its properties remain without tarnishing when exposed to air or water.

Applications

Due to its unique properties and luster, gold has found applications in fabrication, jewelry, coinage and dentistry.

Jewelry fabrication
declined 21% in 2016, primarily due to lower demand from India and China.
Electronics
use of gold declined a modest 2% in 2016, while it was supported by stronger demand for plating salts and a stabilizing of gold used in bonding wire production.
Official coin fabrication
increased 24%, representing another year of stellar growth, largely due to stronger demand for gold as a safe haven.
Dentistry
demand for gold was 5% lower in 2016. Japan remains the largest market in the dentistry industry, accounting for 50% of global demand.
Other industrial & decorative
demand declined 7% in 2016 due to higher gold prices and fall in offtake from India.

Supply & Demand

Supply (Tonnes) 2012 2013 2014 2015 2016
Mine Production 2,883 3,077 3,172 3,209 3,222
Scrap 1,700 1,303 1,158 1,172 1,268
Net Hedging Supply -40 -39 108 21 21
Total Supply 4,544 4,341 4,438 4,401 4,511
Demand (Tonnes)          
Jewelry 2,061 2,610 2,469 2,395 1,891
(+) Industrial Fabrication 429 421 403 365 354
Of which Electronics 307 300 290 258 254
Of which Dental & Medical 39 36 34 32 30
Of which Other Industrial 83 85 79 76 70
Net Official Sector 544 409 466 436 257
(+) Retail Investment 1,407 1,873 1,163 1,162 1,057
Of which Bars 1,056 1,444 886 876 787
Of which Coins 351 429 278 286 271
Physical Demand 4,441 5,314 4,501 4,357 3,559
Physical Surplus/Deficit 102 -973 -62 44 952
ETF Inventory Build 279 -880 -155 -125 524
Exchange Inventory Build -10 -98 1 -48 86
Net balance -167 5 92 217 342

2016 Gold Demand (Tonnes)

 


 

Total physical demand declined for the third successive year, falling by 18% in 2016, largely due to decline in jewelry demand from Asia, while all areas of demand were generally weaker.

3,559 Tonnes
Total Physical Demand
Largely
Supported by
3,222 Tonnes
Mine Production

Gold Supply (Tonnes)

 

Mine Production by Region (Tonnes)

 

The top 20 gold producers
registered a net
year-on-year gain
of close to eight tonnes
with strong increases
in the United States and
and Australia with
offsetting losses
in Peru and Mexico.
 

Gold Production by Country (Tonnes)

2015

 

2016

 

Investment

Global official coin demand – Coin demand grew by 3% year-on-year in 2016, as the gold price decline towards the end of the year triggered buying activity amongst price-sensitive investors.
Physical bar investment - Demand for bullion bars decreased by 10% year-on-year to 787 tonnes in 2016.
Exchange Traded Funds - ETF holdings increased by 34% in 2016, with substantial inflows into global ETFs in the first ten months of the year. This performance was the result of strengthened gold prices following increased geopolitical uncertainty and higher market expectations for an increase in US interest rates.

Total identifiable investment, which includes physical bar investment, coins and changes to ETF holdings, gained 52% in 2016 to reach 1,579 tonnes, the highest since 2012. This gain was aided by the increased level of ETF holdings during the first half of the year.

Source: GFMS Gold Survey 2017