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The World Gold Council states that the total amount
of gold ever mined is 158,000 tonnes, which we can
round out to 5,080,000,000 ounces. I haven't been able to find out the
methodology of how this number is calculated, would love to know. According
to them this is composed of:
2,630,000,000 oz in jewellery
600,000,000 oz in industrial applications
830,000,000 oz held by private investors
915,000,000 oz held by central banks
105,000,000 oz unaccounted for
So we can clearly say that investment holdings are
the 830 + 915 = 1745 million ounces (and for the point I'm making it is
irrelevant if you believe central banks actually have it or not, if they
don't have it, then someone else must). Most of the industrial stuff would be
in non easily recoverable
form (electronics etc), so that we can consider as
not likely to come onto the market. Some of the "jewellery"
could be considered investment (especially in India) with the rest of the
stuff around Western women's necks only likely to come on to the market if the
price was really really high, so at the moment can
be considered non-investment (or long-term core deep investment holdings,
depending on your viewpoint). Lets
assume 9.7% of the jewellery is really investment,
for no other reason than 1745 + 255 = 2 billion ounces, which is a nice round
number.
So there is 2 billion ounces of gold out there as investment. As I mentioned
in my last post on short-term trading, there isn't much transparency in the
gold market. So what can we see?
Below is a chart of all the gold products/systems/ETFs, which I have been
tracking weekly since 2003. Who is in this list? Well the big ETFs (World
Gold Council's Gold Bullion Securities Australia, South Africa, UK, USA &
Barclays USA), Central Fund of Canada, GoldMoney,
e-gold, BullionVault and Milenium
Bullion Fund.
The total ounces of these products
comes out at 28 million ounces. COMEX warehouse stocks in March 2008
were 7.5 million. TOCOM stocks April 2008 were 270,000 oz. That means the
total "transparent gold" the trader can analyse
the movements of is approximately 36 million ounces.
That is about 1.8% of the 2 billion we estimate is out there. Looks like we
have a little bit of way to go before we are fully informed.
Bron Suchecki
Goldchat.blogspot.com
Bron Suchecki has worked in the precious metals
markets since 1994, when he joined the Perth Mint as an Administration
Officer in their Sydney retail outlet. In 1998 he moved to Perth to work in
the then fledgling Depository division. He has held a number of roles since
then in the treasury, risk and governance areas of the Mint.
All posts are Bron's personal opinion and not
endorsed by the Perth Mint in any way.
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