Other supplies of gold

How we recycle gold

Each year gold mining produces over 60% of the world’s supply, with recycling being the next dominant source, accounting for as much as 35% of global supply. These gold supplies mainly come from electronic equipment and people selling jewellery and coins into cash for gold shops.

Recovering gold from uses in electronic equipment is not easy, and even with rising gold prices is only viable where enough gold can be reclaimed. As a result, this source of supply does not increase significantly in correlation with rising gold investment and gold prices.

During this 12 year gold investing bull market, more people have looked to cash in their scrap gold bullion, with supplies of recycled gold nearly doubling in a decade and a proliferation of high street and postal offerings appearing ready to buy granny’s gold. The last three years has seen this form of supply tail off as supplies of scrap gold appear increasingly exhausted.

The final source of gold supply comes from official sales from central bankers and governments. At the start of the millennium, central banks were estimated to be selling 400 tonnes of gold investments a year, but fast forward 12 years and central bankers now busily buy gold.

Central banks now buy gold bullion to the tune of 600 tonnes a year, representing a huge 25% swing in demand in a 4,000 tonne gold market, as they gravitate to the safety of tangible assets in reaction to uncertain financial markets.

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