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By the SRSrocco Report,
The world's top gold producer saw its mine supply plummet by 10% in the
first half of 2017. According to the GFMS World Gold Survey newest
update, China's gold production in 1H 2017 fell the most in over a
decade. The fall in Chinese gold production is quite significant
as the country will have to increase its imports to make up the shortfall in its
mine supply
The data in the GFMS 2017 Q3 Gold Survey Update & Outlook reported
that Chinese gold mine supply declined 23 metric tons to 207 metric tons in
the 1H 2017 versus the 230 metric tons during the same period last year:
The report stated the reason for the decline in Chinese gold production
was due to the government's increased efforts to curb pollution as well as
heightened awareness of environmental protection. Furthermore,
GFMS analysts forecast that Chinese gold production will continue to
deteriorate for the remainder of the year as production is scaled down.
This is undoubtedly bad news for a country that is not only the world's
largest gold producer but also because China consumes all of its domestic
mine supply. To get an idea just how far China is ahead of the rest of
the pack, take a look at the following chart:
Last year, Chinese gold mine supply of 454 metric tons (mt), was
56% higher than second-ranked Austraila at 291 mt. These eight
top gold mining countries produced 56% of the total world's supply of 3,222
mt in 2016. Lastly, you will notice that South Africa came in last
place at 150 mt. However, South Africa was the leading gold supplier in
the world in 1970, when it produced a staggering 1,000 mt:
Also, isn't it ironic that the U.S. dropped the Gold-Dollar peg
(Aug. 1971) the year after South African's gold production peaked?
Regardless, South African gold production is now down 85% from its peak in
1970. For those individuals who don't believe in the theory of Peak
Gold or Peak Oil, stick around a few years... and you will become a believer.
Now, there seems to be another interesting development as it pertains to
Chinese gold production. Unless China experiences a considerable
rebound of its gold mine supply over the next several years, 2014 may turn
out to be its ultimate production peak:
According to the figures reported in the GFMS 2017 World Gold Survey,
China's gold production reached a peak of 478 mt in 2014 and is estimated to
decline to 415 mt* this year (*415 mt is my estimate based on GFMS
data). If the forecast for 2017 is correct, China's gold
production will have fallen 13% from its peak in 2014. Moreover,
if the world experiences a huge market correction and economic contraction in
2018, there's a high probability that Chinese gold production will have
peaked in 2014.
Lastly, the peak and decline of global gold production will likely mark
the time of the peak and fall of the global economy. Now, I am not
saying this occurs the very same year, but it will be a gauge to pinpointing
the very time when reached the SENECA CLIFF.
Lastly, if you haven't checked out our new PRECIOUS
METALS INVESTING section or our new LOWEST
COST PRECIOUS METALS STORAGE page, I highly recommend you do.
Check back for new articles and updates at the SRSrocco Report.
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