This year, gold has been beaten, battered and bruised. Since the spring, gold has fallen all the way down to around $1,200 and $1,300, even in a terrible economic recovery, government shutdowns, enormous debt levels and the announcement that Janet Yellen, a Keynesian and inflationist, will become the next Federal Reserve Chair.
Last year, however, the gold industry contributed $210 billion to the global economy, more than some nations’ GDP, such as New Zealand, Vietnam, Romania, Pakistan and Hungary, according to a report titled “The Direct Economic Impact of Gold” commissioned by the World Gold Council (WGC).
The precious metal has contributed to various sectors of the economy, including bar and coin investment ($38 billion), technology ($4 billion) and jewellery ($70 billion). It has also assisted economic development for developing countries like Ghana and Tanzania.
Report authors do note that the $210 billion could be a lot higher if the study was able to include all of gold mining’s activity, said Terry Heymann, Director of Gold for Development at the WGC.
What should be highlighted, though, is that gold miners have been directly affected this year by weakened prices, market speculation from the federal government and central bank’s stimulus initiatives, strikes and project costs.
“This is a time of change for the entire gold industry. The mining sector is facing a barrage of converging challenges; increasing costs, ever higher expectations from a wide range of stakeholders and a gold price which could call in to question the viability of some projects and lead to a contraction in supply,” said Randall Oliphant, WGC chairman, in a statement. “I believe that it is only on the basis of a more realistic and better rounded understanding of gold’s true impact on our global community that the gold industry can further develop and sustain effective partnerships with all our stakeholders.”
Although prices have been at their lowest in quite some time, many gold bugs still promote the yellow metal – silver too – as a terrific investment and is now a sublime buying opportunity. Economic Collapse News reported this past summer that gold demand has soared 53 percent and has been fueled by central banks, which have been net buyers for the 10th consecutive quarter, the growing middle class in Asia and Western savers.
At the time of this writing, gold is trading at roughly $1,266 and silver is down at $21.22.