Gold will not be precious for long

According to rough estimates the total world gold holdings of the central banks of the countries and the private individuals are around 150,000 metric tonnes. Production of gold was highest in the year 2001 at around 2600 tonnes.  Since then production went down to 2350 tonnes in 2008. Annual increase in gold holdings thus comes to around 1.5%. Against this, world population growth is only about 1.2%. 

The population growth is high i.e. over 2% mostly in developing countries like Ethiopia, Congo, Sudan, Tanzania, Kenya, Afghanistan, Uganda etc. The gold purchasing power of the people of these countries is low and hence the gold requirement in these countries will not increase significantly. On the hand, in developed countries where the gold purchasing power of the people is high, the population growth is negligible or even negative. Developed countries like Japan, Germany, Italy and the east European countries have negative population growth.  Even in high population growth countries, the poulation growth is likely to come down as the economies grow. Thus world population growth is likely to stabilize at less than 1% in the next10-15 years.

As the price of gold which used to be less than US$300 per ounce in 2000, has gone up to nearly US$1200 in 2010,  the gold mines which used be unviable earlier are likely to become viable. The production of gold is therefore likely to increase.

 If the central banks do not buy from the producers and allow the producers to bring gold into the markets, price of gold will keep coming down. Thus gold will gradually become less precious.  In this context, it is good not to keep money in gold.


7 Responses to Gold will not be precious for long

  1. Hi to every single one, it’s actually a nice for me to pay a quick visit this website, it includes important Information.

  2. Asking questions are really fastidious thing if you are not understanding
    anything fully, but this article offers nice understanding yet.

  3. Tonja says:

    Howdy, i read your blօg occasionаlly and
    i owո a similar one and i waѕѕ just curious if you gеt a llot of spam responses?
    If so how do you prеvent it, any plugin oг anything you can advise?
    I get so muich lately іt’s riviոg me ϲrazy so
    any ѕuppor is very mսch appreciated.

  4. Hɑve you ever thought about adrinց a little bit mօre than just your
    articles? I mean, what yoս say is important and everything.
    However imagine іf you aԀded somе great pictures or vіdeos to give your
    osts moгe, “pop”! Your coոtent is excellent but with images and
    videos, this ѕite could definitely be onee of the beѕt in its niche.
    Good bloǥ!

  5. I paу a visit day-to-day a few web pages and sitеs to read coոtent,
    but this wеb site offers feature based content.

  6. Windy says:

    Ңi there to all, because I аm genuinely keen of reading this web ѕite’ѕ post to be updated on a regular basis.
    It incluԀes pleasant material.

  7. Porn Stars says:

    Faѕcinating blog! Ӏs your theme custom made or did you downloаd it from somewhere?
    A desigуn like yours with a few simple adjustements would really make
    my blog shine. Pleɑsee let me know where you got your deѕign.
    Bless you

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: