Benefits of Gold:

A Finite Resource
Or
Why the Gold Price
Can Only Go Up

W W W . G O L D R AT E F O R T O D AY. O R G
 22

GOLD IS A FINITE RESOURCE

1. First, gold is a finite resource, whose

underground reserves will eventually be
completely extracted
2. Second, gold population is growing
and prospering. This increases gold
demand for jewellery and industrial
purposes
3. Third, central banks have been
increasing their gold reserves. All of this
points towards an inescapable raise of
gold’s value and its price
W W W. G O L D R AT E F O R T O D AY. O R G
 33

GOLD IS A FINITE RESOURCE

1. Natural resources can be grouped into

renewable, or infinite, resources such as
coffee, wood and sugar
2. These commodities can be replenished
and will never come to an end
3. On the other hand, there are finite
resources which cannot be produced
4. These are plutonium, sulphur and gold

W W W. G O L D R AT E F O R T O D AY. O R G
 44

GOLD IS A FINITE RESOURCE

Gold production and underground gold

reserves
1. In 2009 and 2010 world gold production
stood at 2,450 and resp. 2,500 tonnes
2. It is estimated by the world still has gold
resources of 51,000 tonnes
3. Thus, with the current annual mining
volume, underground gold reserves
would last for 20 years

W W W. G O L D R AT E F O R T O D AY. O R G
 55

GOLD IS A FINITE RESOURCE

W W W. G O L D R AT E F O R T O D AY. O R G
 66

GOLD IS A FINITE RESOURCE

Sources of gold supply

1. Not all gold supplies come from mines
2. On a five year average (Q4 2005 to Q3
2010) mine production contributed to
only 59% (2,209 tonnes) of the supply
3. Recycled gold is responsible for 35% of
gold supply (1,323 tonnes)
4. The remaining 6% (234 tonnes) are net
official sector sales (such as from
central banks)

W W W. G O L D R AT E F O R T O D AY. O R G
 77

GOLD IS A FINITE RESOURCE

W W W. G O L D R AT E F O R T O D AY. O R G
 88

GOLD IS A FINITE RESOURCE

Sources of gold demand

1. What does the demand side say?
2. Certainly, demand goes up in the long
term, not only because of India’s and
China’s fondness of gold jewellery and
their industries’ demand for gold
3. On a five year average, gold demand
was for jewellery 57% (2,151 tonnes),
investment 31% (1,182 tonnes) and
industrial purposes 11% (433 tonnes)

W W W. G O L D R AT E F O R T O D AY. O R G
 99

GOLD IS A FINITE RESOURCE

W W W. G O L D R AT E F O R T O D AY. O R G
 10
10

GOLD IS A FINITE RESOURCE

Gold demand around the world

1. The Middle East, the Indian
subcontinent and East Asia were
responsible for around 70% of world
demand in 2009
2. China, Hong Kong, the US, Turkey and
Saudi Arabia accounted for half of word
demand

W W W. G O L D R AT E F O R T O D AY. O R G
 11
11

GOLD IS A FINITE RESOURCE

Investment demand
1. Since 2003 demand for investment
purposes experienced the strongest
growth of gold demand
2. From 2004 until 2009 investment
demand increased by 119%

W W W. G O L D R AT E F O R T O D AY. O R G
 12
12

GOLD IS A FINITE RESOURCE

Industrial demand
1. Industrial demand for gold increases
with the growing economies, as gold is
used in electrical components and
medical applications
2. Recent research has discovered
additional uses for gold, such as in
chemical processing and pollution
control

W W W. G O L D R AT E F O R T O D AY. O R G
 13
13

GOLD IS A FINITE RESOURCE

Industrial demand 2
1. On the other hand, many products using
gold are continuously redesigned to
reduce the amount of gold needed (by
cladding based metals with gold), or by
finding substitutes for gold. These may
be palladium, platinum and silver

W W W. G O L D R AT E F O R T O D AY. O R G
 14
14

GOLD IS A FINITE RESOURCE

Three facts should be kept in mind

1. Gold is a finite resource, which
underground supplies is one-twentieth
of the annual gold production
2. Word population is growing and
prospering, which drives up demand for
jewellery and in the industry
3. Central banks (notably from Russia,
China and India) have recently began to
increase their gold reserves

W W W. G O L D R AT E F O R T O D AY. O R G
 15
15

INTERESTED IN MORE?

Visit my blog:
www.GoldRateForToday.org

Live Gold Rates,

Independent Trading Advise
and many Resources
about Gold Investing
W W W. G O L D R AT E F O R T O D AY. O R G