China becomes top gold producer as global demand surges
The year 2023 saw an all-time high in the price of gold. The precious metal, which has been used as a safety asset for the states to fall back on in times of political and economic uncertainty, suddenly saw a clear rise in demand as central banks around the world started buying gold at an unprecedented rate. This uptick in demand can be accredited to multiple factors, with the primary one being the instability introduced by the Russia-Ukraine war. For centuries, gold has been revered as a symbol of power, wealth, and prosperity. With record high prices and almost no effect on demand, China capitalised on this opportunity to overtake Australia for the number one spot as the largest gold producer on a global scale. China produced about 370 metric tons of gold in 2023, with Australia and Russia competing for second place with 310 metric tons of gold. Several other countries also came up with an increase in their gold production: Kazakhstan with 130 metric tons, Mexico with 120 metric tons, Indonesia produced 110 metric tons, and South Africa and Uzbekistan made around 100 metric tons of gold in 2023.
Considering the diversity among the producers of gold, this has given rise to a new and geographically evolving gold market. The demand for gold had been stagnant for the past few years since the pandemic in 2020, as the volatility in currency and stocks was too unpredictable, but that changed recently as major central banks around the world started buying gold in big amounts. Talking about the gold reserves, the USA is at the top of the chart with 8133.5 tons, followed by Germany with 3352.3 tons and so on. China comes sixth on the table with around 2262.5 tons. With India having the ninth-largest gold reserve of 822.09 tons as the Reserve Bank of India is continuously buying gold.
China has overtaken India in terms of gold consumption, becoming the top consumer of the metal in the world. The reasons explaining this spike in consumption are speculative. Still, they are likely because of factors like the cultural affinity to the metal, a growing middle class in the country, and gold’s vital role in the economy as a whole and investment portfolios. The gold industry is predicted to grow even more in the near future, as the projected gold production for the year 2024 is expected to be about 124 million ounces