20 coun­tries that own 88% of the world’s gold

Financial Mirror (Cyprus) - - FRONT PAGE -

Just 20 coun­tries world’s gold.

Ac­cord­ing to the World Gold Coun­cil, de­mand reached 1,290 tonnes in Q1, a 21% in­crease year-on-year, mak­ing it the sec­ond largest quar­ter on record. This in­crease was driven by huge in­flows into ex­change traded funds (ETFs) – 364 tonnes – fu­elled by con­cerns around the shift­ing global eco­nomic and fi­nan­cial land­scape.

Higher prices and in­dus­trial ac­tion in In­dia pushed global de­mand for jew­ellery down (-19%), while to­tal bar and coin de­mand was marginally higher (+1%). Cen­tral banks re­mained strong buy­ers, pur­chas­ing 109 tonnes in the quar­ter. To­tal sup­ply in­creased 5% to 1,135 tonnes. Hedg­ing by pro­duc­ers (40 tonnes) sup­ported an in­crease of 56 tonnes in mine sup­ply, al­though coun­tered by a mar­ginal de­cline in re­cy­cling.

The key find­ings from the re­port first quar­ter of 2016 are as fol­lows:

- Over­all de­mand for Q1 2016 in­creased by 21% to 1,290 tonnes, up from 1,070 tonnes in Q1 2015.

- To­tal con­sumer de­mand was 736 tonnes down 13% com­pared to 849 tonnes in Q1 2015.

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- Global in­vest­ment de­mand was 618 tonnes, up 122% from 278 tonnes in the same pe­riod last year.

- Global jew­ellery de­mand fell 19% to 482 tonnes ver­sus 597 tonnes in the first quar­ter of 2015.

- Cen­tral bank de­mand dipped slightly to 109t in Q1 2016, com­pared to 112 tonnes in the same pe­riod last year.

- De­mand in the tech­nol­ogy sec­tor fell 3% to 81 tonnes in Q1 2016.

- To­tal sup­ply was up 5% to 1,135 tonnes in Q1 2016, from 1,081 tonnes in the first quar­ter of 2015. Mine sup­ply was up 8% to 774 tonnes.

Gold re­serves are not al­ways phys­i­cally stored in the named coun­try. For ex­am­ple Ger­many has a large por­tion of its re­serves stored in the USA, the UK and France.

Also, the prac­tice of gold leas­ing cen­tral banks can call into ques­tion ac­cu­racy of the re­ported fig­ures.

The map does not list all gold hold­ers: coun­tries which have not re­ported their gold hold­ings to the IMF in the last six months are not in­cluded, while other coun­tries are known to hold gold but they do not re­port their hold­ings pub­licly. by the

A gold re­serve is the quan­tity of gold held by a cen­tral bank cur­rency.

His­tor­i­cally a coun­try’s gold re­serve was cen­tral to its fi­nan­cial well-be­ing and sta­tus. How­ever the im­por­tance of gold in this re­gard has de­clined as the amount of gold held by cen­tral banks has de­creased and for the most part gold re­serves do not form a sig­nif­i­cant por­tion of the cen­tral bank’s

to sup­port the

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of for­eign re­serves.

De­spite this, gold is still a very im­por­tant com­mod­ity and con­tin­ues to play a cen­tral role in the world’s econ­omy. This was most re­cently ev­i­dent in the af­ter­math of the 2008 crash when cen­tral banks re­versed a 20 year trend of sell­ing their gold and in­stead started buy­ing gold in an ef­fort to pro­tect their na­tion’s wealth.

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