Gold Yearbook 2019

26 March 2019

Jeffrey Christian
Rohit Savant
Sponsors and Partners

Special Thanks to the Following Partners

For Making the CPM Gold Yearbook
2019 Available in Chinese
Gold Fields Limited
The Institute of Scrap Recycling
Industries, Inc. China Gold Association
Kitco Metals Inc. China National Gold
Monex Precious Metals Group Corporation
NOAH Capital Markets Jingyi Gold Co Ltd.
Sabin Metal Group of Companies
 Gold Prices
Gold Prices: 1 December 2010 to 25 March 2019

$ / Oz
2,000

1,900

1,800

1,700

1,600

1,500

1,400

1,300

1,200

1,100

1,000
10 11 12 13 14 15 16 17 18 19
Global Economic Outlook
Real Gross Domestic Product
Annual, Projected Through 2027

Percent Change Percent Change

10 10
World
8 Emerging and Developing Economies 8
Advanced Economies
6 6

4 4

2 2

0 0

-2 -2

-4 -4

-6 -6
1980 1985 1990 1995 2000 2005 2010 2015 2020p 2025p
London OTC Trading Volumes
London OTC Trading Volumes
Million Ounces Percent
500 100%
Total of All Transactions
450 90%
Spot's Percent of Total
400 80%

350 70%

300 60%

250 50%

200 40%

150 30%

100 20%

50 10%

0 0%
19-Nov-18 24-Dec-18 28-Jan-19 4-Mar-19
Investment Demand

6
Despite What It Seems Like Gold Prices Are Holding Up Fairly Well
Historical Annual Average Real and Nominal Gold Prices

$/Ounce
$2,400
Base Price = 2018
$2,200

$2,000
Real
$1,800

$1,600

$1,400

$1,200

$1,000

$800

$600

$400

$200 Nominal
$0
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Numerous Moderate Probability Risks
Risks, Probabilities, and Impact Of Factors Affecting U.S. Dollar Gold Price
Time Frame: Next Twelve Months
IMPACT
LOW MODERATE HIGH

U.S. Political Risk

Deterioration of
HIGH

Deterioration U.S. economic data

Of Chinese
Economic Data Sharp Decline
In Equity
Sustained Markets
Equity Market U.S. Housing
Volatility Market Decline
PROBABILITY

U.S.
MODERATE

Infrastructure
Spending
Debt Related
Crisis
International Trade
Deterioration of Politics- Policy Wars
E.U. economic Missteps
data Sharp
Increase In
Equity Sharp
Markets Increase In
LOW

Real Rates
Bond Market Crash

Stronger Than
Expected U.S.
Inflation
Gold Investment Demand
Gold Investment Demand
Annual, Investment Demand Projected Through 2019, Prices Through 2018

Percent Change Million Ounces

120 60
Net Investment Demand
100 50

80 40

60 30

40 20

20 10

0 0

-20 -10

-40 -20
66 69 72 75 78 81 84 87 90 93 96 99 02 05 08 11 14 17
Gold and Interest Rates
Median Monthly Returns on Gold in Different Real Interest Rate Environments

Percent Percent
1.5% 1.5%

1.0% 1.0%

0.5% 0.5%

0.0% 0.0%

-0.5% -0.5%

-1.0% -1.0%

-1.5% -1.5%
-3 -2 -1 0 1 2 3
Real Interest Rates
Dollar To Move Sideways At Current Levels
Trade-Weighted Dollar
Monthly Data, through January 2019

Index
120

110

100

90

80

70

60
Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18
Gold ETF Holdings
Annual Net Changes to Gold ETP Holdings Monthly Exchange Traded Products' Physical Gold Holdings

Through Feb. 2019 Feb. 2019

Million Ounces Million Ounces

100
30
90

20 80

70
10
60
0
50

-10 40

30
-20
20
-30 10

-40 0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Investor Interest Was Weak Across Investment Vehicles
Gold Coin Demand
Gross Long and Short Positions of Non-Commercial Positions
Annual, Through 2018
Comex Gold Futures & Options, Weekly, through 05 Mar. 2019
Million Ounces
Million Ounces

12 12 Million Oz. Million Oz.

45 45
10 10 40 40
35 Net Fund Position in Comex Long 35
30 30
8 8
25 25
20 20
6 6 15 15
10 10
5 5
4 4
0 0
-5 -5
2 2 -10 -10
-15 -15
-20 -20
0 0
Short
73 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18
-25 -25
Jan-96 Jan-00 Jan-04 Jan-08 Jan-12 Jan-16
Central Bank Demand

14
Central Bank Gold Demand
Official Transactions
Annual Data, Projected through 2019
Million
Million Ounces
Ounces
25 25
20 20
15 Net Additions 15
10 10
5 5
0 0
-5 -5
-10 -10
-15 -15
-20 -20
Net Reductions
-25 -25
-30 -30
-35 -35
-40 -40
-45 -45
-50 -50
50 53 56 59 62 65 68 71 74 77 80 83 86 89 92 95 98 01 04 07 10 13 16 19p
 Central Banks Display Price Sensitivity
Gold Prices and Shifts in Central Bank Gold Reserves
Annual, Through 2018

Million Ounces $/Ounce

Correlation: -0.52
20 1,800

Gold Prices (Right Scale) 1,500

15
1,200

10 900

600
5
300

0 0
08 09 10 11 12 13 14 15 16 17 18
Supply

17
 Total Gold Supply
Total Gold Year-on-Year Net Changes to Gold Mine Supply, Secondary
Annual, Projected Through 2019 Supply, and Total Supply

Mln Oz Mln Oz
14
140
Secondary Supply 12
10
120 Transitional Economies Exports 8
to Market Economies
6
100 Market Economy Mine
Production 4
2
80
0

60 -2
-4

40 -6
Mine Supply
-8
Secondary Supply
20 -10
Total Supply
-12
0 -14
73 77 81 85 89 93 97 01 05 09 13 17 78 82 86 90 94 98 02 06 10 14 18
Gold Mine Supply Approaching A Turning Point
Total Gold Mine Supply

Mln Oz Mln Oz
100 100

90 90

80 80

70 70

60 60

50 50

40 40

30 30

20 20

10 10

0 0
73 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18
Dollar Versus Major Commodity Currencies
Gold Prices and Domestic Currencies of Major Gold Producers
Percentage Change Between 30 June 2014 and 31 December 2018

RUB

MXN

AUD

ZAR

CAD

Au ($)

-60.00 -50.00 -40.00 -30.00 -20.00 -10.00 0.00

Percent
New Capacity Additions
Dec 2018: Estimated Total Annual Gross Gold Mine Production Capacity Additions Since 2011

Mln. Oz. Mln. Oz.

35 35

30 30
Post 2022 2022 2021

25 25
2020 2019 2018
20 20

2011 - 2017
15 15

10 10
Addition To Capacity Between 2011 and 2017 Due to Rising Prices
Between 2002 & 2011
5 5

0 0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Post 2022
 AISC Rise Driven By Cash Costs
Production-Weighted All-In Sustaining Cost (AISC) For
Quarterly Production-Weighted All-In Sustaining Cost Selected Gold Mining Companies
For Selected Gold Mining Companies
USD/Oz
USD/Oz $1,300
$1,300

All-in Sustaining Costs $1,200

$1,100
AISC:Q1 2013-Q1
2016 - down 22.8%
$1,100
$900

Cash Costs
$1,000
$700

$900
$500
Sustaining Costs
$800 AISC: Q1 2016-Q3
$300 2018- up 10%

$700
12 Q3 13 Q3 14 Q3 15 Q3 16 Q3 17 Q3 18 Q3
$100
Q1 Q1 Q1 Q1 Q1 Q1 Q1
2012 2013 2014 2015 2016 2017 2018
Fabrication Demand

23
 Gold Fabrication Demand
Gold Fabrication Demand
Annual, Projected Through 2019
Million Ounces
120
Other Uses

100 Dental/ Medical

Electronics
80
Developed Country-Jewelry

Developing Country-Jewelry
60

40

20

0
77 80 83 86 89 92 95 98 01 04 07 10 13 16 19p
Gold Prices In Major Gold Consuming Countries
Gold Prices in Select Currencies, Indexed
1 Jan 2017 = 100, Data as of 31 January 2019

Index Index

125 220

120 200

115 180

160
110
140
105
120
100
100
95
80
90 USD EUR 60
Chinese Yuan Indian Rupee
85 40
Japanese Yen Turkish Lira (RHS)
80 20
Jan-17 Jul-17 Jan-18 Jul-18 Jan-19
Auspicious Days For Marriage In India
Auspicious Days For Marriage In India

No. of Days
16
2017
14
2018

12 2019

10

0
1 2 3 4 5 6 7 8 9 10 11 12
Questions

27