Gold, which has been a symbol of wealth for centuries, has been used as a means of payment by individuals for various purposes throughout history, preserving its value and importance. Although this feature has lost its role today, Gold maintains its critical position in economies with its wealth measure, confidence element or speculative aspect.
Although the financial system, which has developed with the gains of globalization and technology, allows investors to evaluate their savings with tools that they can access without physically owning their savings, this situation has not diminished the long-standing attractiveness of the precious metal. While electronic environments allow the opportunity to be bought and sold at instantaneous prices, it has also made the pricing of gold, which has become a ‘safe haven’ among the favorite investment instruments, very sensitive. Because many parameters will be taken into account before the assets of the country to be invested, and the Gold Reserve of the Central Bank of the country in question is a kind of confidence criterion in that country.
In addition, the macroeconomic structure and stability of gold-producing countries have a significant impact on gold prices. In other words, Ceteris Paribus1 may hurt gold prices, as production cuts in a country that is a gold producer will cause a decrease in supply, or the gold stock of the Central Bank, which has a currency of a country where confidence in global markets is fragile, is at a reassuring level. can suppress exits from the currency.
When we look at the global gold production with this information;
62% of the total gold production in the world is met by 10 countries. As the largest gold producer, the People’s Republic of China meets 14% of the total production with an annual production capacity of 458 tons.
In the cake showing the world’s gold production, Australia takes the second place with a rate of 9% after the People’s Republic of China. Australia’s Gold production growth reached nearly 300 million tonnes at the end of 2018.
Russia, which is the world’s largest producer and exporter of many mines and minerals, surpassed the United States for the first time in 25 years, reaching 260 million tons in 2018 with a significant increase in gold production and took the third place in the cake.
According to the report published by the US Geological Survey, the earth science research institution of the USA, on gold production every year; The USA, which meets 8% of the world’s gold production, managed to rank high in the list with a production capacity of nearly 240 million tons with an increase of 9 percent in 2018.
As we mentioned above, when it comes to investment in a country’s currency, the reserves of the Central Bank create a kind of perception of economic confidence against financial speculations that may occur in that country’s currency. This perception is not wrong, but the power of Central Banks to affect the value of the country’s currencies becomes indisputable. Here, too, the US Federal Reserve (FED) with the intervention power of Central Banks with an internationally accepted value, is the country with the largest gold reserve in the world with 8133 tons of gold reserves, while Germany, which follows it, has a negligible gold stock of 3370 tons. not.
Click to read the other Gold articles 👉🏻 Gold Trading: Best Ways to Invest in Gold