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  Gold Net Australia Online Magazine


  GOLD COMMENT - August 2005  

To understand the gold bullion market, with demand and production figures readily available, recovery rates clearly indicate that global production is dropping slightly, and is now clearly insufficient to keep pace with global consumption of gold.

The emerging Chinese market which until last year had a closed market policy in relation to gold. In 2004 China produced 212 tons. A huge rise from a decade ago when it produced about 90 tons a year.

So who are the real gold produces of the world.
Global production of gold - that is from the beginning of human presence on Earth - is about 153,000 tons. About 63% of that has been mined since 1950.
Yearly global extraction of gold from mining enterprises is close to 2,500 tons. Officially it was 2,484 tons in 2004. That is what has been extracted and accounted for by statutory government recording sources.
South Africa remains the world’s largest producer of gold, with just over 344 tonnes and 14% of global production. The US produced almost 262 tonnes (11%), followed by Australia with 258 tonnes. The most spectacular rises in output over the past decade have come from Indonesia, which in 1992 produced just 2 tonnes of gold but in 2004 produced almost 114 tonnes (183 tonnes in 2001).
Emerging Second and Third world countries hold the key to future rises in global production of gold. It is interesting to know that over 51% of all gold mined in a single year are consumed in jewellery. India consumed over 520 tonnes in 2004 for jewellery alone. Second in jewellery was the USA, consuming 350 tonnes. With emerging nations, such as China, who produces jewellery at almost 24 carat (pure gold) global demand is certain to continue to place pressure on demand for more gold.

It is clear that if you own a gold mine, your immediate future is assured.
There is a global trend towards some third world market economies expanding rapidly during the first 2 decades of this century. Although there are substantial reserves still locked in the earth, global production is insufficient to cope with demand.
This clearly means that as demand rises - so will the price of gold. Some estimate that gold purchased now will rise in value over 100% within the next 10 years. Is it any wonder that global demand for gold bullion in the last two years has intensified.


Since Gold Net has been dealing in Bullion it is becoming increasingly obvious that more and more criminal scams originating from the internet relating to the gold trade are reaching epidemic proportions. The Nigerian Scam world is alive and well out there in Gold Trading, believe me. It seems what the criminals are seeking is legitimate Bank Guarantees... known within the trade as BG's. If they can obtain these they onsell to legitimate and illigitimate sources for money.

Quite elaborate schemes are evident. Usually the criminal will offer to legitimate organisations (e.g. Gold Net) gold bullion in quantity. For example 1,000 Metric Tons of gold with Swiss procedures that requires a BG to be forwarded. Unsuspecting or inexperienced legitimate organisations (e.g. banks) who forward BG's soon find they are subject to claims against them - which emanate from unknown sources. Most legitimate players refuse to issue BG's and this is now becoming the norm in gold trading globally. Swiss procedures with gold are now done bank to bank to reduce internet fraud.
Lets hope that law enforcement agencies around the world unite and make a concerted effort to curtail this criminal behaviour globally.

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