Gold: The Most Precious of Metals (Part 3)

Gold: The Most Precious of Metals (Part 3)

Gold production in many countries, especially in developing or emerging markets, has declined in recent years as the global economy has largely improved since the global financial crisis. Many mining operations have shut down or downsized significantly. However, prices have been increasing in 2017 as safe haven buying has increased. In part 3 of our series on gold, we begin with a section explaining why the price of gold has been fluctuating in recent years. This is followed by a section on the history and news on gold production in each of the top gold producing economies globally in 2016 according to the United States Geological Survey as well as the 2017 economic outlook for each according to the FocusEconomics Consensus Forecast.


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What drives the price of gold? 

In part 2 of this blog post series, we included a section on how gold is used to preserve wealth. Because of gold's history as a standard of value in monetary systems, it has left a lasting legacy in today's international monetary system. Historically speaking, those that have held gold have been able to survive crises. This is something that still rings true to this day. During times of economic or financial turbulence, individuals and even foreign central banks look to acquire gold for risk aversion because unlike most other commodities and asset classes, gold tends to preserve its value. This is why gold is referred to as a "safe haven asset."

People generally don't lose confidence in gold, but they do lose confidence in economies and currencies. As a result, the price of gold tends to give us an idea of when a financial crisis is about to hit. As uncertainty begins to fester and sentiment begins to turn negative, confidence in currencies is lost and investment in hard assets increases. Gold’s price, unique to most other commodities, is almost exclusively driven by demand - as demand for gold increases, so does the price.

Since gold pays nothing to its holders and struggles to beat yield-bearing assets when borrowing costs are high, low interest rates tend to support gold prices. Shifts in the value of the U.S. dollar also tend to influence the price of gold, as it is globally priced in U.S. dollars. When the value of the U.S. dollar falls, it makes gold cheaper for foreign investors and consequently helps drive up the price of gold. 

During the global financial crisis the price of gold skyrocketed. The average price of gold per troy ounce in 2007 was USD 696.77 and by 2012 it was USD 1668.69. As global economies began to slowly but surely come out of the crisis the price of gold decreased. In 2015, the average price of gold was USD 1159.8 marking a 30 percent drop in 4 years. Volatility in stock markets and uncertainty over the health of the world economy in 2016 saw prices creep up once again as safe haven investments increased. However, prices have not come close to reaching the sky high prices seen during the financial crisis.

Gold price outlook for 2017

Fears over the Brexit vote sparked a rally in gold prices in mid-2016, but prices came down steadily for the rest of the year. However, in 2017 gold prices have been coming up again. Political developments in the first few months of 2017 drove gold prices, while developments across the globe hit the gold market and high uncertainty has driven recent gains in Q2. The United Kingdom’s general election, former FBI director James Comey’s Senate testimony and rising tensions in the Middle East as a number of countries cut off relations with Qatar drove market anxiety and benefited gold. Geopolitical events have managed to hold prices near the USD 1,300 per troy ounce mark despite widespread expectations that the Fed would hike rates again. On the demand side, a new tax regime in India—the second largest consumer of gold—could impact buying when it comes into place on 1 July. Consumers will face a slightly higher tax, which could hit demand in the short-term.

Healthy demand from Asia should support gold prices this year, although FocusEconomics analysts see prices receding later this year from current levels.

With that in mind, let’s take a look at the world’s top-gold-producing economies according to the USGS including history and news on gold production in each country, followed by their current economic outlooks for 2017.



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Top Gold Producing Countries 2017 -
History and Economic Outlook


The discovery of gold played a large role in Australia’s history starting with the Bathhurst Gold Rush in 1851. Gold finds in other parts of Australia following the Bathhurst Gold Rush brought millions of migrants to Australia. In the 1890s gold was found in Western Australia in Coolgardie and Kalgoorlie. According to The Australian Atlas of Mineral Resources, Mines, and Processing Centres, 60% of gold mined in Australia today comes from that region. Gold is also mined in all of the other Australian states as well as the Northern Territory.

Mining is a significant primary industry in Australia and a major contributor to the country’s economic growth. During the commodities super cycle starting last decade, Australia thrived, but since the commodity bubble burst, the economy and specifically the mining sector has suffered considerably. According to The Australia Institute, 22,000 mining positions were axed between 2013 and 2015 and according to the Sidney Morning Herald, a further 2000 were cut in 2016. The job cuts in the sector give an idea of the state of the mining sector in Australia, and as the country’s third-largest export earner after iron ore and coal, gold mining plays a big part. Australia is the world’s second highest producer of gold, mining an estimated 270 metric tons in 2016 according to the USGS.   

Economic Outlook

The government unveiled its budget for fiscal year 2017-18 on 9 May. The new budget maintains the government’s commitment to return to surplus by 2020/2021, primarily by increasing revenues. A new bank levy together with an increase in the Medicare levy will provide the bulk of the increase in tax revenue. On the expenditure side, the government is pledging to increase investment, with a particular focus on health, education and infrastructure. The budget was largely well received by analysts, who particularly welcomed the shift towards raising revenue, rather than focusing solely on reining in spending. Shortly after the budget was announced, credit rating agency S&P Global Ratings affirmed Australia’s AAA rating with a negative outlook. The ratings agency highlighted the budget’s optimistic wage growth projections as an important reason why it maintained a negative outlook: the government has had a tendency to overestimate wage growth in the past, and wage growth has continued to disappoint at the start of the year.

GDP growth in 2017 is expected to be broadly in line with last year’s result, driven mainly by a recovery in fixed investment and still robust government and private consumption growth. Panelists expect GDP to expand 2.5% in 2017, which is unchanged from last month’s forecast. For 2018, our panel expects GDP growth of 2.8%.


Gold mining in Brazil stretches as far back as the 1690s when the Brazilian Gold Rush began. Unlike most gold rushes, the Brazilian Gold Rush lasted over 200 hundred years until the 1900s. Brazil’s gold mining activities, like many other countries, played a large part in the development of the country and its economy. Although gold has been and continues to be a very important driver for the Brazilian economy, the many years of exploitation has exhausted Brazilian gold mines. However, it is still the 12th highest gold producer in the world with an estimated 80 metric tons in 2016.

Economic outlook

Testimony from a corruption scandal implicated President Michel Temer directly in May, unleashing a political bombshell in Brazil and casting doubt on whether Temer will fulfill his term. Although Temer has held onto power so far and was cleared by the top court of accusations that he violated campaign finance laws on 9 June, he is deeply unpopular and the government’s implication in a corruption scandal is threatening its stability and effectiveness. The political chaos bodes poorly for the economy’s battered recovery as reform momentum will likely slow as politics takes center stage. Although GDP improved notably in Q1 thanks to a record harvest of soybeans and improved sentiment, overall conditions are still weak and incoming data is mixed. Industrial production improved in April but growth remained weak, however, the current account recorded a solid surplus while the manufacturing PMI rose in May.

The sharp increase in political uncertainty led our analysts to downgrade Brazil’s outlook this month. The FocusEconomics panel sees GDP expanding a meagre 0.5% in 2017, which is down 0.1 percentage points from last month’s forecast. The recovery is seen gaining speed in 2018 and GDP should increase 2.2%.


Gold in Canada is found all across the Laurentian Plateau, in British Columbia, Nunavut, and Newfound Land. Gold was first discovered in Canada in 1823 along the Chaudiere River in Quebec. Many years later the legendary Klondike Gold Rush in 1896 sparked a massive migration of prospectors to the Yukon River basin in search of gold with the dream of striking it rich. It has been called the last great gold rush. 

Since then, Canada has been a steady eddie in terms of gold output, especially for the last decade, as it has been at the top of the rankings for gold production by country. In 2014 Canada achieved a record for gold output at 152 metric tons, which marked the first time that it caught up to South Africa in annual output. The estimated output for 2016 by the USGS is expected to be even higher at 170 metric tons.

Economic Outlook

Despite a flat reading in February, the Canadian economy's strong overall Q1 GDP growth is expected on the back of a tightening labor market and an energy sector that has largely adjusted to lower oil prices. Moreover, the Ivey PMI climbed to a 15-month high in April following consistent expansion through Q1 and other indicators point to a recent uptick in business investment. All things considered, however, the economy is far from being out of the woods. Export growth has been subdued as Canadian firms struggle to remain competitive abroad, while, at home, weak inflationary pressures and low wage growth point to ongoing slack in the economy. As NAFTA comes up for renegotiation this summer, political risks also cloud the outlook. Already-astronomical consumer debt levels have risen further as housing has become more unaffordable, especially in the Toronto market. In May, these weakening credit conditions led to across-the-board ratings downgrades by Moody’s for the country’s six largest banks.

Although growth is expected to moderate in H2, a weak loonie and improving global demand should give a much-needed boost to the external sector this year. Meanwhile, a healthier energy sector should pick up some of the slack at home. FocusEconomics Consensus Forecast panelists expect GDP to expand 2.3% in 2017, which is up 0.1 percentage points from last month’s forecast. In 2018, the panel expects growth to edge down to 2.0%.




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China is the number one producer of gold in the world. The USGS estimates that China mined 455 metric tons of gold in 2016. Since gold began to be mined in the 1970s, gold production in China has rapidly increased. China finally overtook South Africa in 2007 as the world’s top gold producer. China’s major gold production regions are generally located in the east of the country, in the eastern provinces of Shandong, Henan, Fujian, and Liaoning. Most of the gold mined in China stays within its borders to produce jewelry. The demand for gold in the west over the last decade has decreased while Chinese demand has increased dramatically. In 2014, China was the top gold consumer in the world at 27.9% of global consumption, just ahead of India at 26.5%.

Although China is the world’s top gold producer, it is expected that Chinese mining companies will begin to explore potential acquisitions of international gold producers to meet demand and reduce dependency on international gold producers. China’s insatiable appetite for gold also led to a new price fix in Shanghai last year in an attempt to start a regional benchmark priced in Yuan to increase its influence in the global gold market.  

Economic outlook

Growth momentum has softened at the outset of Q2 following Q1’s surprisingly resilient dynamics, which led the economy to expand at the fastest pace in one and a half years. Weaker external demand and manufacturing activity weighed on growth in April, while investments in the real estate sector and infrastructure remained resilient. In the political arena, on 14–15 May, China hosted the first Belt and Road Forum, which was the most significant diplomatic event in the country so far this year. This program is the cornerstone of China’s internationalization strategy and earmarks more than USD 1 trillion for investments over the coming years in more than 60 countries. Moreover, China and the U.S. unveiled a set of trade deals on 11 May, which are expected to ease tensions between the two superpowers.

The Chinese economy will decelerate throughout the rest of the year on the back of tighter financial conditions and weaker growth in the property sector. Nevertheless, the government will continue to shore up growth if necessary via infrastructure investment and credit supply. FocusEconomics panelists forecast that the economy will grow 6.5% in 2017, which is unchanged from last month's estimate. In 2018, the panel expects GDP growth to slow to 6.2%.


Ghana has been a major producer and exporter of gold dating all way back to precolonial times when gold was exported from present-day Ghana to Europe via trans-Saharan trade routes. Gold mining was mostly alluvial until the 1860s when modern mining techniques were first implemented to extract gold.

Many years later, Ghana is now Africa’s second largest producer of gold behind South Africa. Southern Ghana is considered to be one of the world’s best regions for gold mining, however, despite still being one of the world’s top gold producers, output of the mineral has dropped significantly in recent years. Much of this has been attributed to the fall in gold prices after the global economy began to look healthier following the crisis. With the decline in mining activities followed increased layoffs in mining operations while even illegal gold miners in the country were giving up. Nonetheless Ghana is still the 11th largest producer of gold globally, the USGS expects the country to have produced 90 metric tons in 2016.

Economic Outlook

Growth in 2016 was the weakest in decades, according to recently released figures. Lower prices for key exports cocoa and oil, a shutdown at oil and gas fields and economic uncertainty generated by large budget overruns all played a part in the subdued performance. The new government has immediately tried to clean up its fiscal act, announcing plans to broaden the tax net and strengthen the fiscal policy framework in order to close the cavernous deficit, and establishing a Revenue Authority Board in early May in order to boost revenue collection, which disappointed last year. In response to the swift action taken to stabilize the economy, credit rating agency Fitch Ratings recently upgraded Ghana’s rating outlook from negative to stable. However, in a recent staff visit to the country the IMF warned that revenue projections for 2017 are optimistic, meaning further adjustments could be required in order to meet the deficit target.

Ghana’s economy will pick up speed this year, thanks to greater oil output as Jubilee field repairs are completed and the TEN Field ramps up production. In addition, the government’s deficit reduction plan, coupled with IMF support, should anchor business confidence, helping investment recover. FocusEconomics panelists expect growth to hit 5.8% in 2017, down 0.1 percentage points from last month’s forecast, and 6.2% in 2018. 


Indonesia is home to one of the largest gold mines in the world, the Grasberg Mine. It did not technically open until the 1980s, but can trace its origins with the Ertsberg mine, which was first discovered in the early 1900s, but didn’t officially open until 1973. The Mine is thought by some to hold the largest gold reserves in the world and contributes the majority of Indonesia’s gold production. The Grasberg mine has been the site of numerous attacks by the Free Papua movement beginning in the 1970s. Papua, Indonesia’s eastern-most province, has been a hotbed for an independence movement among inhabitants of the province, which has prompted the Free Papua Movement to make numerous attacks on the mine over the years. The mine is owned by a foreign company, which has many Papuans resentful, as they believe it profits disproportionally from the region’s natural resources without giving much back. Nonetheless, the mine employs over 19,500 people in the area. Pollution and environmental harm are another source of resentment toward the mine, which many believe is contributing heavily to pollution to surrounding rivers, land surfaces, and groundwater.

Apart from the Grasberg mine, Indonesia is in the midst of a modern gold rush, where it is estimated that, quite remarkably, illegal gold mining is producing more within the borders of the country per year than the estimations of Grasberg’s yearly output. According to a New York Times report, corruption and even more pollution are at the heart of the illegal gold mining in Indonesia. The crucial ingredient in the purification process of the gold by illegal mining operations is mercury, which has environmentalists and other health experts concerned around the world. Many of the small-scale illegal gold mining operations are funded by businesses located in the country’s capital city, Jakarta, which pay local authorities off to allow them to continue the practice. Although illegal gold mining is not taken into account in the USGS survey, Indonesia’s estimated gold output in 2016 by the USGS is thought to be 100 metric tons, making it the 10th highest producer in the world by yearly volume.

Economic Outlook

Surging exports and an increase in public spending led GDP growth to inch up in Q1, after it had dipped in Q4. An improved external backdrop and change in mining policies are boosting exports, which recorded a sixth consecutive double-digit expansion in April. However, overall the economy’s pick-up has been modest, as household consumption was stuck in a moderate gear in Q1, despite cheaper borrowing costs. The economy appears set for another mild acceleration in Q2, and the manufacturing PMI rose in April. In a win for the government, S&P Global Ratings lifted the country’s credit rating to investment grade on 19 May. The country’s sovereign bonds are now rated investment grade by all three major credit ratings agencies for the first time since the Asian financial crisis. Following the announcement, the stock market rose and the rupiah appreciated as the move should boost foreign investment in the Indonesian economy.

Growth should continue to pick up moderately amid higher commodities prices, rising external demand and sound economic fundamentals. Our panel sees GDP expanding 5.2% in 2017, which is unchanged from last month’s forecast. In 2018, GDP growth is expected to pick up further to 5.4%.


Although Mexico has historically been known for its silver mining, it is also a major player in gold production. Gold has been mined in Mexico for over 500 years, and although the country has a long history of mining for precious metals, there are still large deposits of precious metals that have gone untouched. Recent developments in mining technologies are now making it possible to get to some of those untapped deposits while Mexico’s political environment is largely considered to be favorable to mining activities, meaning that Mexico will likely be one of the top-gold-producing economies for the foreseeable future.

However, gold mining in Mexico has not been without controversy. Many mining corporations that are present in Mexico are foreign, such as McEwen Mining Inc., which recently had a refinery robbed and looted by armed gunmen late last year. This was the 3rd attack of this kind in 2015. Kidnappings are also an issue, with workers disappearing and turning up dead days later. This recent flurry of attacks highlights the perils of mining in Mexico and the security issues may present downside risks to the mining sector in Mexico in the future.

Mexico is still a world leader in gold production with an estimated volume of 125 metric tons in 2016.

Economic Outlook

The Mexican economy continues to withstand the uncertainty linked to the U.S. trade agenda and the reverberating effects of soaring inflation remarkably well. A comprehensive set of data showed that GDP grew in Q1 at an even faster pace than at first estimated, while consumer confidence continued to trend higher through May as heightened inflation and tightening financial conditions were offset by still-strong remittance growth and a supportive labor market. However, Q2 has seen incipient signs of a slowdown. The April trade report showed that, while trade dynamics were still positive, key manufacturing exports entered the quarter on a much weaker footing, dragging on the overall exports result. In line with spillover effects from weak manufacturing exports, industrial production growth plunged in April. Nonetheless, things are looking up in the political arena for the ruling PRI party, which in early June obtained a crucial victory in the election for the state of Mexico, the first test ahead of next year’s presidential elections.

Although the risk of a disorderly renegotiation of NAFTA still weighs on the outlook, with talks slated to begin on 13 August at the earliest, our panel of economists continues to reassess their forecasts in light of the resilient dynamics observed so far in the Mexican economy. They now expect GDP to expand 1.9% this year, which is up 0.1 percentage points from last month’s forecast, and 2.2% in 2018 as growth becomes more broad-based.


There is no question that Peru is a mining country with the country’s mineral deposits having been mined going back over 1000 years. One drawback to Peruvian mining is that many of the mineral deposits are located in the areas that are fairly inaccessible in areas of high elevation in the Andes. Peru’s government is pro-mining and open to foreign investment, playing a limited role in the oversight of the country’s mining industry. Much like the mining industry of Indonesia, pollution is a big concern in Peru, especially from illegal mining, which is rampant. Similar to illegal gold mining and production in Indonesia, the use of mercury is widespread. According to the USGS, Peru is the 7th largest producer of gold annually, having producing an estimated 150 metric tons in 2016.

Economic Outlook

Devastating floods and landslides mostly in the north and center of the country plagued growth at the outset of the year. Poor performances in the construction, oil and mining and agriculture sectors led the Peruvian economy to expand 2.1% annually in Q1, the weakest rate in two years. That said, the government’s ambitious plan to rebuild the devastated areas will boost growth in the second half of the year. This more positive economic sentiment following the coastal El Niño phenomenon disaster is spreading through the economy, with business sentiment returning to February’s level in May. Moreover, the external sector continued to expand at healthy rates in April fueled by strong dynamics in shipments of traditional goods—which include metals, natural gas and fish-related products.

FocusEconomics panelists cut their growth forecasts for a fifth consecutive month on the back of severe infrastructure damage. The government’s reconstruction plan and positive dynamics in the mining sector will however cushion the slowdown. Our panel now sees GDP expanding 3.0% in 2017, which is down 0.1 percentage points from last month’s estimate. For 2018, the panel projects growth of 4.0%.



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Russia is a massive country geographically and consequently, as one might imagine, it has a wealth of natural resources. This includes gold and although the country has been mined for gold going back many centuries, gold production actually hit an all-time low as recently as 1998.

Russia’s economy was in a shambles leading up to and after the breakup of the Soviet Union. After the fall of the Soviet Union, the first President of the Russian Federation, Boris Yeltsin, sought to restore Russia to its former glory by privatizing large parts of the economy and dismantling the economy’s central planning mechanism, which didn't work out too well. The economy plunged into despair, culminating in the 1998 financial crisis and Bank Rossii defaulting on its debt. Yeltsin finally resigned on New Year’s Eve in 1998 and put a man in charge whose name many will probably recognize, Vladimir Putin.

Since Putin has been at the head of the table, Russia’s mining sector has gradually developed, reaching a booming period between 2008 and 2009. In fact, since the late 1990s, Russia’s gold production increased two-fold. Although the Russian mining sector largely contributed to the economic resurgence the country saw during the last decade, it is currently at a loss for foreign investment, something it relied on heavily in the past. Low commodities prices have made the mining industry, especially for gold, less attractive for investors. Geopolitical issues with the west and Ukraine as well as macroeconomic uncertainties have also significantly hurt investment in the sector. Since gold mining is geographically diversified, investors can turn to any number of less risky countries for investment.

Russia is still one of the world leaders in gold production. The USGS estimation of 2016 gold output is 250 metric tons, making it the third top-gold-producer in the world.

Economic Outlook

Growth gained steam in the first quarter as the recovery broadens, in part thanks to firmer oil prices. A GDP flash estimate showed a stronger than expected acceleration in Q1 and available data for Q2 point to a healthy start to the quarter: industrial production rose in April and the manufacturing PMI picked up in May. Overall, while signs of a recovery among households have emerged—the unemployment rate has fallen and retail sales data has improved—dynamics are expected to be largely tied to oil prices. In May, Russia along with the world’s other major oil-exporting countries agreed to extend production cuts until March 2018 in an attempt to support oil prices. However, a lack of compliance could threaten the deal’s effectiveness and in May oil output among some nations included in the agreement is expected to have risen.

Recovering private consumption and higher oil prices should propel growth in 2017. The FocusEconomics panel sees GDP expanding 1.3% in 2017, which was left unchanged from last month’s forecast. For 2018, analysts see GDP growth accelerating to 1.7%.

South Africa

In 1886, when George Harrison stumbled across gold in South Africa, he set off a chain reaction starting with the Witwatersrand Gold Rush that changed South Africa from a largely agricultural society to one of the largest gold producing nations in the world. This was all the more important at the time, as the gold standard was still in its golden age.

So many migrants came to South Africa with the dream of striking it rich that some of South Africa’s biggest cities sprung up as a result of the gold rush, including the capital, Johannesburg. The gold discovery led to the widespread construction of infrastructure like roads, railroads, buildings, towns and made it the richest country on the continent of Africa. Gold has continued to be a massive contributor to South Africa’s economy, and as was mentioned earlier, the country was the king of gold production until China overtook it as the number one gold producing economy just a few years ago.

As is a theme with many commodity-driven economies, the low-commodity-price environment has hurt South Africa’s gold mining industry of late. Although many of South Africa's mines have become depleted of their proven reserves, they are still located on top of possible reserves. Unfortunately, the nature of the low-commodity-price environment has meant that mining for that gold is no longer economically viable. Investment in mining activities has been an issue as it has been in Russia, as macroeconomic issues have left the country in a precarious position. Power outages and drought have hurt the agricultural sector and manufacturing respectively, leading to unemployment and a depreciating rand. South Africa is still a leading producer of gold, producing an estimated 140 metric tons in 2016, the seventh highest mark in the world.

Economic Outlook

The South African economy continues to languish. While manufacturing recovered and retail sales posted strong growth in March, economic activity remains weak and the economy is still at risk of falling into a technical recession. Two credit rating agencies downgraded the country in April, which could dent private consumption and investment and thereby dampen economic prospects. This spells bad news at a time when a new political crisis is engulfing the embattled president and could distract the government from economic affairs. Not only does President Zuma face a no-confidence vote but he is also waging a fierce battle with members of his own party just weeks before the party’s policy conference in June. The meeting defines the economic and political priorities for the next five years and comes before the December conference where a new leader will be elected.

The economy is expected to recover this year thanks to an improvement in the agricultural sector and higher prices for several of the country’s key export commodities. Panelists participating in the FocusEconomics Consensus Forecast project that the economy will grow 1.1% in 2017, which is unchanged from last month’s forecast, and 1.6% in 2018.

United States

In 1799, Conrad Reed found a 16-pound gold nugget in a creek that ran through the family farm located in North Carolina. The nugget served as a door stop for three years until a jeweler recognized the rock on Reed's porch and very slyly asked him to name his price. Conrad asked for USD 3.50 for the nugget. Shortly thereafter, the first commercial gold find and subsequent gold rush in the United States began. Following the North Carolina Gold Rush, of course, was the famous California Gold Rush, which led to a massive migration of people from all over the world to the west coast of the United States in search of riches in the form of gold, hastening the settlement of the great wild west of the United States. Over 150 years later, the United States is still a top producer of gold globally with the state of Nevada supplying close to 70% of the country's gold output itself. Gold production in the states has been on the decline since 2000, as demand for gold has decreased within its borders, but the country can still count itself among the elite with an estimated 209 metric tons of output in 2016 making it number 4 on the list of top gold producers.

Economic Outlook

The U.S.economy seems to be back on its feet after having run aground in Q1 at 1.2% annualized growth. The April job report noted stronger employment gains compared with March and a further decline in the unemployment rate, which continues to prove a boon for households who have seen inflation rising and financial conditions tightening but only moderate wage growth. In line with the brisk pace of job creation, retail sales picked up pace in April, which suggests that the stagnation in private spending observed in Q1 was indeed temporary. Industrial production also leaped at the outset of Q2, recording the largest expansion in more than three years in April on higher core manufacturing and mining output. With survey-based data still strong, GDP growth is poised to come in at a stronger clip in Q2 despite the political storm that has engulfed the Trump administration in recent weeks.

Heightened political noise is raising doubts about Washington’s ability to roll out growth-inducing policies later this year. Nonetheless, our panel sees the U.S. economy with more than enough wind in its sails and thus expects it to grow 2.2% this year, which is unchanged from last month’s projection. For 2018, the panel sees growth picking up slightly to 2.4%.


Mineral mining and especially Gold production plays an important role in the economy of Uzbekistan. Gold is primarily found in the Kyzylkum Desert and is home to the Muruntau Gold Deposit, the largest single open-pit gold mine in the world. The gold deposits were first found in the area in 1958 with the mine opening a few years later. The mine has produced around 1500 metric tons of gold to date and the deposits of gold in the area are expected to last until 2032. Many experts believe that Uzbekistan may be on top of the world’s largest gold reserves with experts quoting figures ranging from 2500 – 5300 metric tons of gold yet to be mined. Uzbekistan is expected to have produced 100 metric tons of gold in 2016 as estimated by the USGS.

Economic Outlook

The new administration’s push for infrastructure investment and enhanced economic cooperation and trade with neighboring countries continues to dominate headlines. President Shavkat Mirziyoyev’s official visit to China in mid-May allowed for the signing of cooperation agreements worth USD 20 billion, the largest amount since bilateral relations were established and a further testament to China’s crucial role in the shaping of the Uzbek economy. Meanwhile, data from the state-owned Uzbekneftegaz showed plans to implement oil and gas projects worth USD 30.4 billion by 2021, mainly aimed at increasing production of export-oriented refined products.

Although persistent structural weaknesses will continue to weigh on growth, higher remittances linked to Russia’s economic recovery and strong infrastructure spending will ensure a certain degree of resilience in the economy. Our panelists see the economy expanding 6.4% in 2017, unchanged from last month’s forecast, and 6.5% in 2018.

The Future of Gold

As the demand for gold increases globally, especially as economies in Asia continue to develop, we may have to ask, what does the future of gold look like? Gold is scarce and costly to mine. However, almost all of the world's gold that has ever been mined is somewhere in the world at the moment, but its likely that most of it is locked away in a vault somewhere, as government and individual investors increasingly “bar hoard”. As more sophisticated technologies are developed to detect the presence of gold in areas that were previously thought to not hold gold or to be depleted, the better for top-gold-producing economies. However, environmental concerns over the mining and production of gold will have to be taken into account as these technologies progress. Will gold mining continue at profitable rate ... on Earth? The high demand for gold used for jewelry, risk aversion, and for industrial and technological uses, will probably not be surpassed in the near future by a substitute, leading many scientists to look toward the heavens. Asteroids that have passed by Earth have been studied and indications are that there are high deposits of metals and minerals present on them. The question perhaps is, will human’s historic obsession with gold lead to mining it in outer space? How could this affect the price of gold in the future? Who will be the top-gold-producing economies once humans start landing on asteroids? Only time will tell.

Hopefully, if you have read all three parts of our series on Gold: The Most Precious of Metals, you will have learned a lot that you didn't know about gold before. If you haven't had a chance to read our other posts on gold, have a look at part 1, Gold | A History of Obsession, in which we detail human kind's history of obsession with the yellow metal going as far back as BC 4000 up through the 1970s, ending with a discussion on the potential viability of the gold standard in today's economy. In part 2, we go through how gold is mined and processed, about the uses of gold other than for jewelry, and about gold's importance to the global economy as both a commodity and monetary asset.


Date: June 19, 2017

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