For decades, only the jewelry industry had a constant need for new gold. Otherwise, the yellow metal was hoarded by the central banks as a reserve for the paper money issued. But there was no industrial demand outside of jewelry.
That changed cautiously with the advent of computers and smartphones. They also need gold. Not much, but enough to end up accounting for around a tenth of the total annual demand. In the meantime, this proportion is increasing, because the gold is required in more and more digital applications.
The gold is now also being used in medicine and aerospace. Out in space, for example, gold’s ability to shield heat very well is of particular importance. Heat-shielding foils are therefore manufactured with a thin layer of gold.
With the multitude of applications, the demand for gold is also increasing
The list of applications does not end there, because gold is being used more and more as a component of new alloys with special properties. If the energy turnaround is not just to remain a distant goal, but to become reality soon, much more copper will be required.
However, copper often occurs geologically in connection with gold. This means that the increased search for new copper deposits will inevitably lead to more gold deposits being searched for.
In 2022, mines produced 3,611 tons of gold worldwide. Around half of the annual gold production has been absorbed by the jewelry industry in recent years. The rest ended up in the vaults of central banks or private investors.
Since the central banks, especially those in the emerging and developing countries, are also building up and expanding their gold holdings, it is to be expected that the fight for the world‘s gold will become increasingly fierce. This speaks for rising prices in the long term if the global demand for jewelry should remain at the current level and at the same time the industry and the central banks are demanding more and more gold.