Gold Supply From Mines Failed to Keep Pace with Rising Demand
The production by South Africa and Peru too were down by 59% and 45% respectively.
SEATTLE (Scrap Monster): The latest quarterly report published by the World Gold Council (WGC) indicates that mined gold supply continued to slide compared to global demand for gold.
The report suggests that total gold supply witnessed dip by 4% in 2020, compared to the year before that. The global gold mine production during the year fell by 4% to total 3,401 tonnes. The production during Q4 2020, at 896t, hit lowest quarterly total in five years.
The reduced mine production is primarily attributed to disruptions in mining operations at various mines due to Covid-19 pandemic restrictions. The highest decline in output was seen in Mexico, which saw Q2 production dip by 62%. The production by South Africa and Peru too were down by 59% and 45% respectively.
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The total gold supply in 2020 reached 4,633 tonnes. Excluding recycled gold supply, which amounted to 1,297t, the supply totalled 3,401 tonnes. When comparing with the total annual gold demand of 3,759 tonnes, it leaves a deficit of 358t. This essentially means that mined gold was not sufficient to meet the demand for gold during the previous year.
The drop in reserves of major gold miners and falling grades at various mines are likely to limit mined gold supply in coming years. The exploration activities to create new gold resources will likely remain on the back foot, mainly due to high risks and cost factors associated with them.