The latest findings come from a new report titled, Gold 2048: The next 30 years for gold, which was conducted by the World Gold Council (WGC) to examine the state of the industry and forecast the sector’s future.
“As the middle class expands rapidly in China, India and elsewhere, demand for gold will undoubtedly increase. The gold mining industry is going to be challenged to produce as much gold in the next 30 years as it has done during recent years,” WGC CEO Aram Shishmanian stated.
Sluggishness in the two largest markets, India and China, was attributed as one of the principal causes for gold jewellery demand falling to a seven-year low of 2,042 tonnes in 2016, according to the WGC Gold Demand Trends Full Year 2016 report.
According to the latest study, technological advancement will become an increasingly important factor in the industry, while economic growth will continue to support global mining.
“Production methods and stakeholder relations will need to evolve if the gold industry is to make a meaningful contribution to society over the next three decades.”
Barrick Gold Corporation chief innovation officer Michelle Ash believes companies will have to look to alternative mining methods to meet rising consumer demands to decrease environmental impacts.
“I believe that open pit mining will become increasingly unpalatable to local communities and central governments. Even today there is growing antipathy to the use of large amounts of land for mining, especially in developing countries where subsistence farming is practised,” she stated.
“Over time, this aversion is likely to become more pronounced, driving mining increasingly underground.”
Gold predictions
John Reade, head of research and chief marketing strategist at WGC made a number of observations about where the industry will stand in 2048:
- In China, traditional 24-carat gold jewellery will become much less common; 18-carat, 22-carat and modern 24-carat jewellery will predominate.
- Economic development in countries such as Vietnam, Indonesia and Cambodia is likely to drive gold demand in Southeast Asia.
- Greater efforts will be made by refineries, jewellery fabricators and vault holders to assure customers against environmental, unjust social practices and money laundering.
- The US will lose its position as the largest economy to China.
- WGC does not expect a substantial recovery in developed-market jewellery demand, as historic buyers of large amounts of jewellery are ageing. It believes younger market consumers prioritise experiences over the purchases of material goods, including jewellery.
In addition to jewellery, the report analysed other factors impacting total global gold demand, including investment, central banks, supply and technology. No specific mention of gold jewellery demand in Australia was made.
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