The Banking Executive Magazine - May 2024 Issue

World Gold Resources resistance to corrosion. It is used in connectors, switches, and printed circuit boards. • Computers: Gold is essential in computers for efficient signal trans- mission. It is used in connectors, relay contacts, and circuit boards. • Dentistry: Gold alloys are used for dental restorations, including crowns. Their biocompatibility and durability are unmatched. • Aerospace: Gold-coated surfaces protect spacecraft components from extreme temperatures and ra- diation in space. • Awards and Symbols: Gold medals, Oscars, and Grammys symbolize achievement and excel- lence. • Glassmaking: Gold is used for dec- orative glass gilding and leaf appli- cations. GOLD GEOGRAPHICAL DIVERSITY Gold is geographically spread in China, India, Turkey, and United States (US). • China Gold: In China, gold is often gifted to younger members of the family for special occasions, and there is a tradition of giving gold to new born babies in the form of tiny necklaces or bracelets. Gold also has a special place in the Chinese New Year when ornate pieces of jewellery in 24 carat, often featur- ing zodiac symbols are purchased for their investment value as well as their beauty. • India Gold: India is one of the largest markets for gold, and growing affluence is driving growth in demand. Gold has a central role in the country’s culture, considered a store of value, a symbol of wealth and sta- tus and a fundamental part of many rituals. Among the country’s rural population, a deep affinity for gold goes hand in hand with prac- tical considerations of the portabil- ity and security of jewellery as an investment. • US Gold: Weddings are a major driver of gold jewellery demand in the US. While wedding rings have been a part of Western European culture for centuries, the modern Ameri- can tradition of the gold wedding band took off during the Second World War, when soldiers fighting overseas wore rings to remind them of their loved ones back home. • Turkey Gold: Turkey, perhaps better than any- where else, illustrates the broad role gold can play in modern soci- ety. Gold is embedded in Turkish life: merchants pioneered the use of gold coins in ancient Lydia, and today gold plays an important and innovative role in Turkey’s econ- omy. GOLD SUPPLY Mine production accounts for the largest part of global gold supply, typically, 75% each year. However, annual demand requires more gold than is newly mined and the shortfall is made up from recycling. Mine production does not respond to price changes quickly. There is usu- ally a long lead time between explor- ing for new gold deposits and a mine entering into production. As it is vir- tually indestructible, nearly all of the gold ever mined is theoretically still accessible in one form or another and potentially available for recy- cling. Gold mining is a global industry with operations on every continent except Antarctica, and gold is extracted from mines of widely varying types and scale. At a country level, China was the largest producer in the world in 2022 and accounted for around 10 per cent of total global production. GOLD MINED STOCK The best estimates currently avail- able suggest that around 212,582 tonnes of gold have been mined throughout history, of which around two-thirds has been mined since 1950. And since gold is virtually in- destructible, this means that almost all of this metal is still around in one form or another. the BANKING EXECUTIVE 10 ISSUE 185 MAY 2024 Total above-ground stock (end-2023): 212,582 tonnes Jewellery ~ 96,487t, 45% Bars and coins (including gold backed ETFs) ~ 47,454t, 22% Central banks ~ 36,699t, 17% Other ~ 31,943t, 15% Proven reserves ~ 59,000t GOLD STOCK IN THE WORLD Source: Metals Focus, Refinitiv GFMS, US Geological Survey, World Gold Council