London Bullion Market Association - London Gold Fixing (10:30 AM and 3:00 PM Local London Time)
CME Group / NYMEX Gold Futures
CME Group / NYMEX E-Mini Gold Futures
NYSE Arca Gold BUGS Index
SPDR Gold Shares GLD Price
Gold is a dense (19.32g/cm3) but soft naturally occurring metal, and in nature it occurs as flakes, grains or nuggets in rock material, as veins in rock (in situ), or separate grains and nuggets eroded from rock material in alluvial deposits. Gold most often occurs as a gold silver alloy or as a gold tellurium alloy.
Gold is very malleable and ductile, which means that it is not brittle and will not shatter when beaten or rolled (gold can actually be made into a thread). The metal is scentless, non-toxic, and also has a very high resistance to oxidization in air, water, or corrosive agents . Gold also readily creates alloys with copper, silver, palladium, and other base metals. Thus, the flexibility and shine of the metal, and its rarity (the amount of gold in the world is finite and it cannot be created) resulted in its past several millennium of usage by man for ornamental purposes, and as a form of monetary value / exchange.
The largest usage of gold is in jewelry fabrication (approximately 80% of annual world production) and consumption. The balance of gold is used as a storage of value (investment), and as a component in manufacturing electronics, telecommunications equipment, laser and optical equipment, aviation, and medical / health although it is being used less in restorative dentistry than has been used in the past.
The World Gold Council indicates that "the total volume of gold ever mined up to the end of 2009 was approximately 165,000 tonnes (metric tons), of which around 65% has been mined since 1950."
|Gold Mining Process|
The key to profitability in the gold mining business is keeping the cost per ton of excavating / mining gold bearing material below the market value of the net gold per ton of gold bearing material. However, the market value of gold is a variable value, and the net realizable gold per ton of material is a variable value, which is why a mine operation can quickly shut down if the market value of gold declines below the cost to projected revenue equilibrium point. One way around this situation is to enter into a forward contract to sell the mine's gold production at a specific price.
Gold panning, which is a manual procedure, and sluicing still exist but are used only by small scale / individual operations.
In surface excavation, large drilling rigs bore a pattern of holes into the rock, which is then filled with an explosive compound. The compound is then ignited in order to fragment the rock into a size that can be loaded and hauled away.
Large masses of rock are excavated, crushed and processed to remove and separate gold particles from the crushed rock. Some mines specifically excavate for gold or gold is found as a by-product during the excavation for other minerals such as copper or silver. It is very rare to actually locate gold nuggets that are of 0.900 in fineness (parts per thousand).
Cyanidation is the method of extracting gold and silver contained in ores or concentrates by dissolving them in a weak solution of potassium or sodium cyanide.
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|Gold Producing Nations|
In 2008, Gold Fields Mineral Services Ltd. (GFMS Ltd.), publicly indicated that the People's Republic of China gold production surpassed that of South Africa, and the nation became the world's largest gold producing nation, producing approximately 276 metric tons / 9.7 million ounces of gold in 2007. China continued to increased gold production again in 2008 and 2009, and remains the leading gold-producing nation, followed by Australia, South Africa, and the United States.
The U.S. Geological Survey, Mineral Commodity Summaries (2010), estimates total, combined 2009 world gold mine production at 2,350 metric tons.
Andean Resources, Ltd., operates the Cerro Negro project, which is located in the southern province of Santa Cruz. The company indicates that the project (Eureka, Vein Zone, and Bajo Negro) has a reserve of 3.1 million ounces of gold (as of March 2010).
Google Map Location of the Cerro Negro Field Region
AngloGold operates the Cerro Vanguardia field in the southern province of Santa Cruz.
Couer d'Alene Mines Corporation (Coeur Argentina S.R.L.) operates the Martha Mine project in the southern province of Santa Cruz, approximately 30 miles northeast of the town of Gobernador Gregores.
The Alumbrera mine is located in northwest Argentina.
The Gualcamayo mine is located in the northern San Juan province of Argentina.
The Veladero mine (open pit) is located in in San Juan Province (Frontera District at the border with Chile).
The Australian Bureau of Agricultural and Resource Economics (ABARE) indicates that Australian gold mine production was 218 metric tons in 2009. Australia’s gold mine production in 2010 is estimated to increase by 10% to 239 Metric tons. The ABARE indicates that a "number of development projects in Western Australia will underpin this increase, including Newmont’s recently commissioned redevelopment of the Boddington mine. Once operating at full capacity, this project is expected to produce around 31 tonnes of gold a year, making it the largest gold project in Australia. Also contributing to the growth in production is the ramping up of OzMineral’s Prominent Hill (an increase of 3 tonnes), the return to higher grade ores for the Kalgoorlie Joint Venture Super Pit (3 tonnes) and increasing production from Avoca’s Higginsville project (2 tonnes). Partly offsetting these increases are estimated falls in production from Newmont’s Tanami operations (a decrease of 3 tonnes) as a result of maintenance activities and lower ore grades. Production of gold as a by-product at Xstrata’s Ernest Henry mine is estimated to fall by 2 tonnes during the year, partly as a result of wet season flooding."
The U.S. Geological Survey, Mineral Commodity Summaries (2010) estimates Australia 2009 gold mine production at 220 metric tons.
The Kalgoorlie Consolidated gold mine (Barrick Gold Corp., Newmont Mining Corp.) is located in Western Australia. Kalgoorlie operations consist primarily of the Super Pit open-pit mine (also referred to as the Fimiston Open Pit), which is located along the Golden Mile ore bodies previously mined from underground.
Google Map Location of the Kalgoorlie Consolidated Field
The second largest gold mine in Australia is the Callie underground gold mine (Newmont Mining Corp.) located in the Tanami Desert, Northern Territory.
Google Map Location of the Callie / Tanami Field
Dioro operates the Frog's Leg project, which is located approximately 25km west of Kalgoorlie, and the South Kal Project, which is located approximately 25km south of Kalgoorlie.
Gold is also mined in the Boddington area of Western Australia.
The U.S. Geological Survey, Mineral Commodity Summaries (2010) estimates Brazil 2009 gold mine production at 50 metric tons.
Gold is mined in the area of Sierra Grande, Brasil Mineracao.
The São Francisco (Yamana Gold) gold mine is located within the Guapore Gold Belt. The São Vicente mine, also owned by Yamana Gold is located near by.
Fazenda Brasileiro (Yamana Gold) is an underground gold mine located in northeast Brazil, 180 kilometres north northwest of the state capital of Salvador.
The Jacobina complex of underground mines (Yamana Gold) is located in the state of Bahia, in north eastern Brazil near the Serra do Jacobina mountains.
The U.S. Geological Survey, Mineral Commodity Summaries (2010) estimates Canada 2009 gold mine production at 100 metric tons.
Agnico-Eagle Mines Ltd. operates the LaRonde Mine in Quebec.
Lake Shore Gold (38% owned by Hochschild Mining Plc)) operates the Timmins Mine. Lake Shore Gold has announced an updated production target of 65,000 ounces of gold in 2010, building production over the following three years with the potential to produce 350,000 ounces by 2013.
The U.S. Geological Survey, Mineral Commodity Summaries (2010) estimates Ghana 2009 gold mine production at 85 metric tons.
Gold is mined in the interior of the country. It has been reported in the media that Ghana contains the second largest area of gold deposits in the African region after South Africa. Anglo Gold Ashanti operates the Iduapriem mine. Newmont operates the Ahafo mine. The Parliament of Ghana voted to increase the mining royalty to 5.0% from the existing 3.0%, and has indicated that it wants to renegotiate existing contracts.
The U.S. Geological Survey, Mineral Commodity Summaries (2010) estimates Indonesia 2009 gold mine production at 100 metric tons.
Gold is mined as a byproduct of the copper mines at Grassberg (Freeport-McMoran) and at Batu Hijau (southwest cost of the Nusa Tenggara Barat peninsula; Newmont Mining Corp.).
Google Map Location of the Batu Hijau Field
Polyus Gold operates the Aksu (open pit), Bestobe, and Zholymbet mines through its subsidiary JSC MMC Kazakhaltyn (the acquisition of KazakhGold, which is under investigation by the Government of Kazakhstan).
Sumitomo Metal Mining Co., Ltd. operates the Hishikari Mine in Kagoshima Prefecture.
Gold is mined at the Morila deposit in southern Mali, and the Yalea deposit at Loulo in western Mali.
The U.S. Geological Survey, Mineral Commodity Summaries (2010) estimates Mexico 2009 gold mine production at 55 metric tons.
Gold is mined (as a byproduct of silver mining) at Palmarejo.
Gold is mined at the Oyu Tologi copper and gold mine in southern Mongolia.
Google Map Location of the Oyu Tologi Field
The U.S. Geological Survey, Mineral Commodity Summaries (2010) estimates Papua New Guenia 2009 gold mine production at 65 metric tons.
Harmony Gold Mining Co. operates the Wafi-Golpu mine.
Lihir Gold Ltd. (LGL) operates the open-pit Lihir gold mine is on the island of Lihir, in Papua New Guinea's (PNG) New Ireland Province, approximately 700km north east of Port Moresby. In August 2010, the company was acquired by Newcrest Mining Ltd.
Google Map Location of the Lihir Island Region
The U.S. Geological Survey, Mineral Commodity Summaries (2010) estimates the People's Republic of china 2009 gold mine production at metric 300 tons.
Zijin Mining Group operates the Zijinshan Gold-Copper Mine in Fujian Province, which is recognized as China's largest proven reserve gold mine. However, in July 2010, the mine operation experienced 2.4 million gallon acidic copper waste water spill and the company will first have to deal with fines and environmental control investment prior to additional expansion.
Eldorado Gold operates the Jinfeng mine in Guizhou Province. In 2008 the mine produced 150,928 ounces and in 2009 the mine produced 166,824 ounces. Eldorado owns 82% through Eldorado's wholly owned subsidiary Eldorado Pacific Pty Limited. The remaining interest is owned by the local joint-venture partner Guizhou Lannigou Gold Mine Limited.
Google Map Location of the Jinfeng Mine / Guizhou Province Region
Eldorado Gold operates the Tanjianshan mine in Dachaidan Region, Haixi Prefecture, Qinghai Province, northwest China. In 2008 the mine produced 118,468 ounces and in 2009 the mine produced 105,610 ounces
The U.S. Geological Survey, Mineral Commodity Summaries (2010) estimates Peru 2009 gold mine production at 180 metric tons.
Gold is mined at Minera Yanacocha, which is located approximately 375 miles (603 km) north of Lima in the Andes Mountains in the Province of Cajamarca.
The Cerro Corona mine (copper / gold, open pit) is located in northern Peru in the Andes Mountains.
The U.S. Geological Survey, Mineral Commodity Summaries (2010) estimates Russia 2009 gold mine production at 185 metric tons.
Gold is mined at Veduga, Anenskoye, Sovromenine, Aprelkovskoye. In the far northeast of Russia, Kupol deposit is located in the northwest part of the Anadyr foothills on the boundary between the Anadyr and Bilibino Regions in the Chukotka Autonomous Okrug.
Polyus Gold commenced operations at its new Blagodatnoye mine in the southern Krasnoyarsk region. The company also operates the Olimpiada and Titimukhta mines in the southern Krasnoyarsk region; the Zapadnoye in the Irkutsk region; the Kuranakh mine in Republic of Sakha (Yakutia).
Highland Gold operates the Novoshirokinskoye mine.
Google Map Location of the Southern Krasnoyarsk Region
The U.S. Geological Survey, Mineral Commodity Summaries (2010) estimates South Africa 2009 gold mine production at 210 metric tons.
South African gold production has been steadily declining over the past several years and in 2008 the nation was no longer the largest producer of gold in the world. During 2009, continued electric power generation problems, coupled with continuing labor problems in South Africa, caused several mines to continue to produce at reduced production levels.
Gold Fields Ltd. operates the Driefontein mine in South Africa.
Harmony Gold Mining Company Ltd. maintains operations located on the Witwatersrand Basin.
Gold is mined in the Vaal River (Great Noligwa, Kopanang, Moab Khotsong and Tau Lekoa) and West Wits regions. The Vaal River area is located just west of the towns of Klerksdorp and Orkney, and operations are along both sides of the river in the Free State and the Northwest State. The two important geological formations are the the Vaal Reef and the secondary Crystalkop Reef.
Google Map Location of the Vaal River Field
Gold is mined in the states of Alaska, Nevada, Arizona, Montana, California, Utah and Colorado. The U.S. Geological Susrvey, Mineral Commodity Summaries (2010), estimates that U.S. gold mine production was 210 metric tons in 2009, a 9.9% decline from 233 metric tons in 2008. In response to the economic recession, consumers in the United States became net sellers of owned gold jewelry in response to the increasing gold price and continued difficult economic conditions. In 2009, 190 metric tons of new and old scrap was recycled, which was more than the reported consumption amount of 170 metric tons.
The U.S. Geological Susrvey, Mineral Commodity Summaries (2010), further indicates that 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 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 2009, the value of mine production was about $6.4 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, 72%; electrical and electronics, 7%; dental and other, 21%.
In Nevada, Barrick Gold Corp. owns the Goldstrike operations, which includes the Betze-Post open pit and the Meikle and Rodeo underground mines along the Carlin Trend near Elko.
Google Map Location of the Goldstrike Field
Apollo Gold Corp. operates the open pit Montana Tunnels Mine, which is a 50% joint venture with Elkhorn Tunnels, LLC, in Montana.
A second well developed gold mining area in Nevada is the Battle Mountain complex.
Google Map Location of the Battle Mountain Field
Coeur D'Alene Mines Corp. operates the Rochester Mine just outside of Lovelock, Nevada.
Google Map Location of the Rochester Mine Field
Northern Dynasty Minerals Ltd. operates the Pebble Project copper-gold-molybdenum mine in southwestern Alaska in a joint-venture with Anglo American plc. Reserves are estimated at 2,080 metric tons (reported as 66.9 million troy ounces) of gold.
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There is a spot (cash) price for gold and a futures contract price for gold.
In June 2010, the spot and futures prices for gold reached record highs, and the price has remained high even when the U.S. dollar strenghthened in value against the Euro and Yen. As jewelry consumption, the traditional demand of gold consumption, has been declining while the price has been increasing is the reflection of the increase in the investment in gold due to its appeal as a low risk asset / safe haven investment in response to economic conditions, decline in equities markests, the possibility of inflation in the future due to substantial fiscal stimulus spending programs, and concerns about the fiscal positions of several European economies, including those of Greece, Spain, Portugal and Italy.
The price of gold was allowed to float in 1968. The price of gold is quoted in terms of troy ounces (one troy ounce equals 31.1 grams). The statutory rate of a troy ounce of gold is $42.2222.
In the United States, Gold futures contracts are quoted and traded on the COMEX division of the CME Group member
exchange New York Mercantile Exchange / NYMEX (open outcry / pit trading); CME Globex (electronic trading platform);
CME ClearPort (traded off-exchange for clearing only). This is a benchmark contract (sets the price for this specific resource worldwide).
London Bullion Market Association - London Gold Fixing (10:30 AM and 3:00 PM Local London Time)
Every day at 10:30 a.m. and 3:00 p.m. local London time, the five bullion trading houses "fix" the price of gold which becomes the benchmark for the entire gold market. At the start of each fixing, the Chairman announces an opening price to the other 4 members who relay this price to their customers. The reason why London endures in this role is the presence of the Bank of England which has a long history of direct dealing and marketing of gold into international markets on the behalf of customer countries (the U.S. Federal Reserve Bank does not do this). The five fixing market makers are Barclays Capital, Bank of Nova Scotia-Scotia Mocatta, Deutsche Bank AG London, HSBC Bank, and Société Générale
|Gold Consumption & Usage|
The largest usage of gold is in jewelry fabrication (accounting approximately for 80% of annual world production in the past) and consumption (India, United states, European Union, China, Saudi Arabia, Eqypt, Turkey, Italy). The balance of gold is used as a storage of value, and as a component in manufacturing electronics, telecommunications equipment, laser and optical equipment, aviation, and medical / health.
However, in 2009 (and into 2010) jewelry consumption continued to decline as the price of gold continued to increase. In response to the economic recession, consumers in the United States became net sellers of owned gold jewelry in response to the high prices and continued difficult economic conditions. In 2009, 190 metric tons of new and old scrap was recycled, which was more than the reported consumption amount of 170 metric tons.
In India (and in Indian communities around the world), those who participate in the Hindu festivals of festive season of Ganesh Chaturthi, Dusshera, Dhanteras and Diwali have traditionally purchased gold jewelry as part of the festival observance (Diwali occurs in the late Fall / October). Within India, gold is priced in terms of Rupees / Rs per 10 grams, and there are separate prices for Standard gold (99.5 purity) and pure gold (99.9 purity). There are also separate bullion market rates in Mumbai, Delhi, Kolkatta, Chennai, Vijayawada, Proddutur, Visakhapatnam, and Rajahmundry.
|Gold Weight & Fineness|
Both the troy system and avoirdúpois system are British standards of measurement. Avoirdúpois is derived from the French term "avoir du pois", or goods of weight, and the troy system takes its name from a city in France where it originated (Tries).
|Gross Weight||Fine gold content in ounces troy|
|Bars of 995.0 assay||Bars of 999.0 assay||Bars of 999.9 assay|
|To convert this:||To this:||Multiply by:|
|One kilogram||Troy Ounces||32.15074656|
|Metric Ton||Troy Ounces||32,150.746|
|One troy ounce||Grams||31.1034768|
|One troy ounce||Grains||480|
|One troy ounce||Kilograms||.0311034768|
|One Tael||Grams||50 (People's Republic of China)|
|One Tael||Grams||37.5 (Hong Kong; Taiwan)|
Gold Weight Conversion Calculator:
Enter an amount in any box to calculate the equivalent weight.
|Gold Loan / Gold Lending|
|Central Bank Holdings (Official Gold Reserves)|
The combined holdings of these parties account for approximately 24,197.5 metric tons / 81.7% of total (above ground) gold reserves (29,633.9 metric tons) at September 30, 2009. In November 2009, India purchased 200 metric tons from the IMF.
The Central Bank Gold Agreement of 1999 (renewed March 2004) requires that the 15 largest government and supranational gold owners restrict their sales into the market at a pace that would not cause substantial disruption of the price (presently a combined maximum of 500 tons per annum for the next five years).
In the United States, the bulk of United States' gold reserves is stored under security at the Fort Knox Bullion Depository. The balance of any official United States' gold reserves are held in the Philadelphia Mint, the Denver Mint, the West Point Bullion Depository and the San Francisco Assay Office. The Federal Reserve Bank of New York also has an extensive gold storage vault, however this is primarily allocated storage for second parties and not U.S. gold reserves. The main vault of the New York Federal Reserve opened September 1924, and the Fed does not charge for the storage service but does charge a nominal handling fee for shipping gold in / out of the vault.
|Gold Industry and the Gold Commodity Market Information Resources|
Amalgamated Prospectors and Leaseholders Association of Western Australia (APLA) www.apla-prospectors.org.au/
Artisinal Gold council www.artisanalgold.org/
Australian Bureau of Agricultural and Resource Economics (ABARE) www.abare.gov.au/
Central Office for Precious Metals Control, Federal Customs Administration, Switzerland www.ezv.admin.ch/ezv/00433/index.html?lang=en
Geoscience Australia (Australian Government) www.ga.gov.au/minerals/mineral-resources/gold.html
Gold Fields Mineral Services www.gfms.co.uk/
International Council on Mining and Metals www.icmm.com/
International Cyanide Management Code www.cyanidecode.org/
Prospectors and Miners Association of Victoria Australia (PMAV) www.pmav.org.au/
The Gold Institute www.goldinstitute.org/
London Bullion Market Association www.lbma.org.uk/
World Gold Council www.gold.org/