Gold Production by Country

Pinnacle Digest writes: As you may be aware, since the 2008 crisis, global gold production has been on the rise. However, there are some underpinning issues with the global increase in gold produced. If you look at gold production by country, you will see that most of the increase in production (globally) is coming from countries which avoid or make it difficult for foreigners to invest. In this article by Scott Wright, a colleague of Pinnacle Professor Adam Hamilton at Zealllc.com, the global gold production increase is broken down country by country to better explain the growth.

During the late 90’s and early 2000’s, global gold production was deteriorating due to the weak price of the precious metal. However, since the 2008 financial crisis, production has picked up steam globally, but that doesn’t necessarily mean we can capitalize on it. You see, the vast majority of the gold production increase has come from China and Russia. Both countries make it extremely difficult for investors to capitalize on as their gold mines are owned by the state or companies in bed with the government, according to Scott Wright. It was only in 2007 when China surpassed South Africa as the world’s largest gold producer. With that stated, we wonder how much of the gold produced in China ever leaves the country. And we don’t believe it to be a coincidence that both Russia and China have rapidly increased their gold production since the 2008 financial crisis. Both countries were very critical of the US’ stimulus programs and hold vast amounts of US dollars. Could the two countries be building their own gold supplies as a hedge against a weakening dollar? We think it’s likely. And in such case, much of the increase in global gold production is off limits to international investors.

Scott Wright does a fantastic job of breaking down exactly where gold production has increased, the political issues affecting investment in the sector and which countries have dropped the ball in recent years.

Wright points to the fact that despite Canada being considered ‘pro-mining’ the country has done a poor job maintaining its gold mining infrastructure and its production is down over 20% since 2001. However, with the increase in gold exploration since 2009 in Canada, we expect the country to catch up to at least 2001 production levels fairly soon.

Click here to read Scott Wright’s article which breaks down gold production in the US, Australia, China, Russia, Ghana, Mexico, Canada and even Peru. This is a must read article for any gold stock investor.