In 2018, 3,503 tonnes of gold were produced globally. That was 1.8% higher than the global gold production in 2017. A tonne (also called a metric ton) is equal to 1,000 kg. Let’s look at the world’s top gold-producing countries.
Like other industries such as retail and smartphones, China is a top player in global gold production. It is the largest gold-producing country in the world. In 2018, China produced 404 tonnes of gold. That accounts for 11.5% of the world’s total gold production.
Notably, China’s gold production has been on a downward trend for the last two years. Lower gold prices, higher production costs for older and depleted mines, and stricter safety and environmental regulations are among the factors that drove the decline.
Top gold-producing countries
Australia is the second-largest gold-producing country, accounting for 9% of the world’s gold production. Russia, the United States, and Canada follow Australia as the largest global gold producers. These top five countries together accounted for slightly more than 40% of the total gold production in 2018.
Other top gold-producing countries include Peru, Indonesia, Ghana, South Africa, and Mexico. The above graph shows the top 10 gold-producing countries in the world. The continent of Africa produces the most gold (GLD) among all the continents.
Uses of gold
A versatile precious metal, gold is used in making jewelry, certain electronics products, industrial uses, dentistry, and as an investment such as coins and bars. Finally, central banks purchase gold to add to their reserves.
Jewelry, bars, and coins comprise around 75% of the world’s gold demand. Purchases by central banks account for around 15% of global gold demand. Technology demand—including electronics products, industrial uses, and dentistry—accounts for around 7% of the gold demand. Around 2% is from exchange-traded funds and similar investment products.
Top gold-consuming countries
Apart from being the largest producer, China is also the largest gold-consuming country in the world. It accounts for roughly 35% of the global consumer demand, which includes jewelry, bars, and coins. China accounted for 1,058 tonnes of consumer gold purchases in 2018. India follows China as the largest consumer of gold. Other top consumers include the United States, Germany, and Iran.
With respect to the demand from central banks, Russia topped the chart with the Russian central bank purchasing 274.3 tonnes of gold in 2018. Notably, the United States has the largest gold reserves in the world. As of September 2019, the US had 8,133 tonnes of gold in reserves. Germany and Italy follow the US as the countries with the highest gold reserves.
Interestingly, top fund managers have differing views on the suitability of gold in investors’ portfolios. You can learn more in Will Buffett’s Distaste for Gold Hurt Berkshire Investors? For more analysis on gold and bonds, please read Could This Week’s Fed Meeting Boost Gold and Bonds?