U.S.Geological Survey (USGS): Gold

Statistics and Information: Gold has been treasured since ancient times for its beauty and permanence. Most of the gold that is fabricated today goes into the manufacture of jewelry. However, because of its superior electrical conductivity and resistance to corrosion and other desirable combinations of physical and chemical properties, gold also emerged in the late 20th century as an essential industrial metal. Gold performs critical functions in computers, communications equipment, spacecraft, jet aircraft engines, and a host of other products. Although gold is important to industry and the arts, it also retains a unique status among all commodities as a long-term store of value. Until recent times, it was considered essentially a monetary metal, and most of the bullion produced each year went into the vaults of government treasuries or central banks.

Gold
(Data in thousand metric tons of gold content unless otherwise noted)

Gold was produced at about 50 lode mines, a few large placer mines (all in Alaska), and numerous smaller placer mines (mostly in Alaska and in the Western States). In addition, a small amount of U.S. domestic gold was recovered as a byproduct of processing base metals, chiefly copper. Thirty operations yielded more than 99% of the gold produced in the United States. In 2008, the value of mine production was about $6.7 billion. Commercial-grade refined gold came from about 2 dozen producers. A few dozen companies, out of several thousand companies and artisans, dominated the fabrication of gold into commercial products. U.S. jewelry manufacturing was heavily concentrated in New York, NY, and Providence, RI; areas with lesser concentrations include California, Florida, and Texas. Estimated uses were jewelry and arts, 80%; electrical and electronics, 8%; dental and other, 12%.

U.S. Recycling: 120 tons of new and old scrap, equal to about 67% of reported consumption, was recycled in 2008.

U.S. Depletion Allowance: 15% (Domestic), 14% (Foreign).

U.S. Government Stockpile: The U.S. Department of the Treasury maintains stocks of gold, and the U.S. Department of Defense administers a Governmentwide secondary precious-metals recovery program.

Events, Trends, and Issues: U.S. domestic gold mine production in 2008 was estimated to be 3% less than the level of 2007. Reduced production from several mines in Nevada and one mine in Colorado accounted for much of the decrease. These decreases were partially offset by increases in production from one mine in Alaska, one in California, and a few in Nevada. Despite the decrease in production, the United States rose to the third leading gold-producing nation and was a net exporter of gold.

Power generation problems, coupled with the continuing increase in costs at South African gold mines and continuing labor problems, has caused several mines to curtail production and expansion projects. Other mines were closed owing to safety concerns, and some operations were temporarily closed in order to divert electricity to other facilities. Australian gold producers faced similar production declines and also had power problems; however, the main reasons for the drop in production were the lower average grades and rising costs. Indonesia saw drastic drops in production owing to lower grades and heavy rainfall. With the production decreases in the major gold-producing nations and China’s increased gold production, China remained the leading gold-producing nation, followed by South Africa, the United States, and Australia.

Jewelry consumption continued to drop as the price of gold continued to increase. The estimated price in 2008 was 29% higher than the price in 2007. During the first 9 months of 2008, Engelhard Corp.’s daily price of gold ranged from an alltime high of $1,011 per troy ounce on March 17 to a low of about $741 per troy ounce in early September.

With the increase in price and the worldwide economic slowdown, investment in gold has increased. Gold Exchange-Traded Funds (ETFs) have gained popularity with investors. According to some industry analysts, investing in gold in the traditional manner is not as accessible and carries higher costs owing to insurance, storage, and higher markups. The claimed advantage of the ETF is that the investor can purchase gold ETF shares through a stockbroker without being concerned about these problems. Each share represents one-tenth of an ounce of allocated gold.

World Mine Production, Reserves, and Reserve Base: Reserves and reserve base estimates were revised, excluding Australia and China, based on a commercially available database of reserves and resources of mines and potential mines.

World Resources: An assessment of U.S. gold resources indicated 33,000 tons of gold in identified (15,000 tons) and undiscovered (18,000 tons) resources.9 Nearly one-quarter of the gold in undiscovered resources was estimated to be contained in porphyry copper deposits. The gold resources in the United States, however, are only a small portion of global gold resources.

Substitutes: Base metals clad with gold alloys are widely used in electrical and electronic products, and in jewelry to economize on gold; many of these products are continually redesigned to maintain high-utility standards with lower gold content. Generally, palladium, platinum, and silver may substitute for gold.

(e) Estimated. E Net exporter.
(1) Metric ton (1,000 kilograms) = 32,150.7 troy ounces.
(2) Reserves and reserve base for the “Other countries” category does not include some countries for which reliable data were not available.
(3) U.S. Geological Survey National Mineral Resource Assessment Team, 2000, 1998 assessment of undiscovered deposits of gold, silver, copper, lead, and zinc in the United States: U.S. Geological Survey Circular 1178, 21 p.

U.S. Geological Survey, Mineral Commodity Summaries, January 2009