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About Gold and Silver

Gold market overview


The principal uses of gold are for the fabrication of jewellery and other products, and bullion investment. Gold has many unique metallic properties that make it valuable to industry and a viable monetary metal including its resistance to corrosion, high electrical and thermal conductivity, ductility and malleability, heat reflectivity and low toxicity. Therefore, gold is used extensively not only in jewellery but also in fabrication processes, including the manufacturing of coins and electronic components in dentistry and medicine, and in applications in a number of other industries.


Demand for gold is driven primarily by demand for jewellery, which is used for adornment and, in much of the developing world, as an investment. More readily accessible and liquid gold investment vehicles, such as exchange traded funds (“ETFs”), have further facilitated investment in gold. Retail investment and industrial applications represent increasingly important, though relatively small, components of overall demand. Gold bonding wire and gold plated contacts and connectors are the two most frequent uses of gold in industrial applications. Although a large part of physical gold demand is centred in Asia, demand for gold is widespread, both by application and geographic distribution.

Sources of gold supply

Sources of gold supply include mine production and the recycling or mobilising of existing above-ground stocks. The largest portion of gold supplied into the market annually is from mine production. The second largest source of gold supply is from gold scrap, recovered from jewellery and other fabricated products. Governmental sector sales, which include sales of gold by central banks, also supply gold to the marketplace. The hedging or forward selling of gold by producers will serve to accelerate the supply of gold to the market, although this component has been largely absent from the market over the past decade.

Mine production

Mine production includes supply from both primary and secondary deposits, where gold is recovered as a by-product of other mining activities. Over the past decade mine production has accounted for more than half of total supply. The balance has come from supplies of existing above-ground stocks, predominantly from the recycling of fabricated gold products and governmental sector sales.

Silver market overview


Silver is a precious metal the uses of which stem from its unique collection of properties including anti-bacterial qualities, corrosion resistance, malleability, ductility and photo-sensitivity of certain silver compounds. These have contributed to its use in an increasing number of industrial applications, in addition to its traditional uses in jewellery and photography. Silver was one of the earliest metals to be used as a medium of exchange and is one of the world’s most broadly used metals, with many practical applications. Silver has a number of unique properties that make it a preferred material in several industrial applications and restrict substitution.


Demand for silver is spread over diverse sectors, but can be loosely categorised into three sub-sectors of physical demand: industrial (decorative and photography); consumer (including jewellery and silverware); and investment. Together these account for the vast majority of silver off-take. Fluctuations in demand for silver are driven primarily by industrial off-take and, in recent years, investor activity.


Sources of silver supply include mine production and recycling or mobilising of existing above-ground stocks. The largest portion of silver supplied into the market annually is from mine production. The second largest source of annual silver supply is from silver scrap, which is silver that has been recovered from jewellery, photography and other fabricated products and converted back into marketable silver. Sales by the official sector is the third source of silver supply. Finally, producer hedging, which accelerates the sale of un-mined silver, can positively (or negatively, in the case of de-hedging) impact supply in a given year.

Mine production

Mine production of silver provides just over 4/5 of total supply. The remainder of silver supply originates from existing above-ground stocks, predominantly coming from the recycling of fabricated silver products. Mine production comprises silver produced from primary deposits and secondary deposits. Secondary deposits refer to mining operations where the silver is recovered as a by-product metal from other mining activities. Silver distinguishes itself from many metals, including gold, by the fact that more than two-thirds of silver mine supply is a by-product of other metal mining (in most cases lead, zinc, copper or gold). As a result, a significant portion of mined silver may be largely independent of movements in the price of silver. Although silver mine production has been steadily rising for almost a decade, the proportion of silver produced at primary silver mines has remained consistent at around one third of total silver mine production.

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