The supply of gold rose in the second quarter (Q2) of 2010, with an increase of 17% over Q2 2009. Also, up was mine production by 5% over 2009 to 658.5 tons. This increase was fueled by new operations that increased gold mining productivity.
Australia led the way with new Mewmont’s Boddington gold mine supplying the largest output of gold. Other very productive mines in Q2 2010 were the Agnico Eagle gold mine in Mexico and the Valadero mine in Argentina.
Not all gold mines had a productive quarter as the Grasberg mine in Indonesia and the Yanachocha mine in Peru both declined by 32%. Poor grades of ore were contributed to the production decline.
The big buyers in Q2 2010 were central banks that took more gold out of the market. The official numbers came in at a net purchase of 7.7 tons. The IMF in Q2 2010 was a heavy buyer of 47 tons of gold which now puts their inventory to 283.1 tons. This total leaves only 120.2 tons left that have been marked to sale.
Russia is one of the leading countries looking to acquire gold to their reserves including 34 tons in Q2 2010. Russia has shown to have a committed program to accumulating a large reserve of gold.
Recycled gold hit the second highest quarter with 496 tons changing hands which was up 35% over Q2 2009. The increase in people selling their own personal gold bullion positions can be attributed to the higher prices across most markets foreign and domestic. The recycling of gold has been on a steady increasing trend as many have started to look at cashing in on what can be considered nice profits. Non Western markets especially the Asian markets saw high amounts of Q2 sales from market specific high gold prices.
The increase in recycled gold is also attributed to the belief that many held gold in the first quarter of 2010 with expectations of higher prices to come in the second quarter which did materialize. In the United States gold prices hit record highs in June.
India seems to be one country still holding out for even higher prices for gold. Their second quarter numbers for gold recycling was considerably lower than expected.
ITM Trading is a fifteen year-old precious metals firm specializing in physical gold, silver and platinum products used as a safe-haven as well as growth. We can be reached at 1-888-OWN-GOLD or www.itmtrading.com.
