Wednesday, July 3rd 06:00 PM IST

Global Gold, Silver production may rise in coming years despite current bearish prices

# gold  # silver market  # production  # jewellery  # demand  # supplies  

A few months ago, it was reported that global silver production had reached a record high of 787 million ounces. A major factor in this rise is attributed to silver being a by product of other mining operations focused on different metals. Another factor is the abundance of mining operations in countries such as China, Mexico and the India, with the Lead and Zinc sector accounting for a large amount of the silver by product.

By Julie Tapton
NEW JERSEY (Bullion Street)Due to recent reforms in the Departmentr of Environment and Natural Resources (DENR) of Philippines, we can expect to see an increase in metals output in the coming years, including areas of precious metal mining, gold in particular. Although the reforms are specific to the Philippines, there are predictions and recent reports that show precious metals in particular, are set to have increased levels of production in the next 4 to 5 years.

Global predictions
A few months ago, it was reported that global silver production had reached a record high of 787 million ounces. A major factor in this rise is attributed to silver being a by product of other mining operations focused on different metals. Another factor is the abundance of mining operations in countries such as China, Mexico and the India, with the Lead and Zinc sector accounting for a large amount of the silver by product.

Gold has seen an increase too, again particularly in China, were predictions suggest that the production rate of the metal will rise by around 10% this year alone. China has already shifted previous top producer South Africa from its spot on the global production stage, and it looks like production figures will continue to rise in the bear future. In addition, the buyers market for Gold in China is healthy and on the increase, as the metal is seen as a sold investment for wealth. Again, it looks set to overtake India as the largest gold buying market in the world.

This bodes well for the Philippines in particular, especially due to the expansion of the Oceana Gold Corps mining project in the country. With such a stable and emerging economy in China, local and international mining companies will be keen to exploit this to their advantage.

Prices and the market
Of course, one outcomes of more common availability to precious metals means that prices will drop. The bullion market is already feeling the effects of this. The Federal Government in the USA has reduced asset spending, and as a result many traders were keen to move their bullion on as quickly as possible last year. Prices have stayed fairly low, and will probably continue to do so, which is a source of interest for large gold buying countries like India in particular. The effects on the consumer market appear to be interesting.

Again, looking at the Indian market, many consumers have been quick to take advantage of the recent slump in prices, and this has of course been advantageous to jewelers. Declining prices have also affected other countries, with the UK for example, seeing an increase in demand for gold coins from the royal mint as alternative forms of investment since the stock market crash. Like India, this is trickling down to consumer level too. Gold or silver is often the first choice for gifts, and while consumers rush to take advantage of prices, business placed in the Gift industry, such as solo.co.uk, will no doubt be reaping the advantages of lower cost silver and gold.

The effects on industry
Of course, while lower prices may be advantageous to the consumer and investor, industry operators will be watching closely to see how things play out. While prices are lower than usual, gold in particular is becoming a more favored investment tool. The recent financial crisis has caused a shift in private investment towards gold bullion in particular, so while current market values are lower, the perceived value of gold is rising, and it’s likely that the market will follow in time. Even with the market being the way it is currently, as mentioned there is a large emerging market in China, so demand will still be high globally.

The Chinese mining industry, for one, doesn’t seem worried about price slumps. Production figures are staying high the face of lower prices. One consequence though, is that investment in the gold mining industry in China has slumped as prices have fallen. Overall, the rising demand for gold and other precious metals, along with the increase in production from various mining operations around the world means that precious metals are just as valuable now as they have ever been, perhaps more so with the more and more consumers looking to protect their investments with gold or silver bullion.

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