Gold Markets in the past thirty years, more diversified in supply and demand

Over the past thirty years, the gold market has materially evolved, becoming more diverse both from demand and supply perspectives.

Back in the early 1990s gold was predominantly driven by consumers. Net fabrication demand – jewellery and technology – accounted for the vast majority of gold demand from 1992-2002. In contrast, during the past decade, net fabrication has made up a healthy but smaller 44% of annual average gold demand, reflecting developments within the gold industry, the macroeconomic backdrop, and changes in the gold price. Jewellery and technology demand also now play an important balancing counterpart to investment and central bank demand. Combined, gold’s role as a consumer good and investment asset underpin its unique dual nature and effective role as a diversifier.

The geographical spread of demand has also changed over the past thirty years. was published Asian demand made up 45% of the world total. Today, the region makes up almost 60%, led by transformational economic growth, especially in India and China. This is a clear illustration of wealth expansion as one of the most important drivers of gold demand over the long run.

Supply has evolved too. Annual gold mine production has grown from 2,270 tonnes (t) in 1992 to 3,612t at the end of 2022 – just below the growth rate that demand has experienced over that period. And, at the same time, the geographic dispersion of mine production has widened. Not only is mine production more diverse than ever, but it is evenly split along regional lines.

This is a key strength of the gold market and one reason that it maintains low volatility.

Dispersion allows for more stability in primary supply and reduces the risk of supply shocks, a feature already supported by gold’s abundant above-ground stock.

This is not the only change we’ve seen in relation to mine production. Over the last three decades, the industry has made a greater socio-economic impact in the areas in which it operates. And in recent years the industry has made great strides in its efforts to decarbonise.