BREAKING: China – World’s Largest Gold Producer Mine Supply Plummets 10%

The world’s top gold producer saw its mine supply plummet by 10% in the first half of 2017.  According to the GFMS World Gold Survey newest update, China’s gold production in 1H 2017 fell the most in over a decade.  The fall in Chinese gold production is quite significant as the country will have to increase its imports to make up the shortfall in its mine supply

The data in the GFMS 2017 Q3 Gold Survey Update & Outlook reported that Chinese gold mine supply declined 23 metric tons to 207 metric tons in the 1H 2017 versus the 230 metric tons during the same period last year:

The report stated the reason for the decline in Chinese gold production was due to the government’s increased efforts to curb pollution as well as heightened awareness of environmental protection.  Furthermore, GFMS analysts forecast that Chinese gold production will continue to deteriorate for the remainder of the year as production is scaled down.

This is undoubtedly bad news for a country that is not only the world’s largest gold producer but also because China consumes all of its domestic mine supply.  To get an idea just how far China is ahead of the rest of the pack, take a look at the following chart:

Last year, Chinese gold mine supply of 454 metric tons (mt), was 56% higher than second-ranked Austraila at 291 mt.  These eight top gold mining countries produced 56% of the total world’s supply of 3,222 mt in 2016.  Lastly, you will notice that South Africa came in last place at 150 mt.  However, South Africa was the leading gold supplier in the world in 1970, when it produced a staggering 1,000 mt:

Also, isn’t it ironic that the U.S. dropped the Gold-Dollar peg (Aug. 1971) the year after South African’s gold production peaked?  Regardless, South African gold production is now down 85% from its peak in 1970.  For those individuals who don’t believe in the theory of Peak Gold or Peak Oil, stick around a few years… and you will become a believer.

Now, there seems to be another interesting development as it pertains to Chinese gold production.  Unless China experiences a considerable rebound of its gold mine supply over the next several years, 2014 may turn out to be its ultimate production peak:

According to the figures reported in the GFMS 2017 World Gold Survey, China’s gold production reached a peak of 478 mt in 2014 and is estimated to decline to 415 mt* this year (*415 mt is my estimate based on GFMS data).  If the forecast for 2017 is correct, China’s gold production will have fallen 13% from its peak in 2014.  Moreover, if the world experiences a huge market correction and economic contraction in 2018, there’s a high probability that Chinese gold production will have peaked in 2014.

Lastly, the peak and decline of global gold production will likely mark the time of the peak and fall of the global economy.  Now, I am not saying this occurs the very same year, but it will be a gauge to pinpointing the very time when reached the SENECA CLIFF.

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26 Comments on "BREAKING: China – World’s Largest Gold Producer Mine Supply Plummets 10%"

  1. Cost of production rises.

    http://www.minerals.org.au/file_upload/images/gold/graph15.png

    All in costs for Australias gold mining industry:

    http://www.minerals.org.au/file_upload/images/gold/graph16.png

    Soon we will have crypto’s with a 5% gold backing, or something like that. Counterfeiting until the bitter end.

    • lol that data is up to 2011. We are in 2017 and there are gold miners that have considerably improved on their AISC. Such data can be misleading

      • So gimme the chart till 2017. I didn’t look it up because the trendline is obvious. Depletion of everything, including oil and gold.

  2. Hubbert, Simmons, Campbell, Steve St. Angelo et all, Thank you!
    You are going to be so vindicated, it’s really scary

  3. Thanks Steve!

  4. China has been buying off the market almost as much as it has been producing from it’s mines for a long time. In 2007 a major Gold deposit was found in Tibet but required western skill to design and develop. I was one of the investors for that development which offered an excellent return. When the mining started in 2008 the results were greater than expected. BUT in 2010 the Western engineers and investors were thrown out and my investment lost. In March 2013 the mine collapsed killing 83 people. The reports of China’s production in gold is not accurate. They seem to be following the example of the De Beers mining of Diamonds. Diamonds are NOT rare but are as abundant as garnets BUT they bought all the diamond mines and stored all the diamonds only releasing a few a year thus controlling price.
    If they are following the De Beers method then Gold could go astronomical!!
    But then again why would China want to dominate all the world’s economy?
    Do you think they want to? Do you think they Khan?

  5. Michael Kohlhaas | October 31, 2017 at 4:37 am |

    “Also, isn’t it ironic that the U.S. dropped the Gold-Dollar peg (Aug. 1971) the year after South African’s gold production peaked?”

    Funny, indeed! No wonder you are having confidence in your prediction. Wouldn’t the peak of gold production happening at the same time as the peak of the global economy and globalism itself be even more ironic? Can’t wait to see the whole crap hitting the fan.

    In case you don’t know me. I am the revenge!

  6. silverfreaky | October 31, 2017 at 5:03 am |

    Die Zinsstrukturkurve hat sich derzeit stabilisiert und sowohl die kurzfristigen als auch die langfristigen Zinssätze steigen wieder (Rendite der 2- und 10-jährigen US-Anleihen).Um auf die eingangs gemachte Behauptung zurückzukommen: Steigende Rendite sind nur dann bullisch für Gold, wenn die längerfristigen Zinsen schneller klettern als die kurzfristigen, oder anders gesagt, wenn die Inflation schneller steigt als die kurzfristigen Rendite. Wenn die 2-Jahres-Rendite beispielsweise bei 2,00%-2,25% ein Hoch erreicht, die 10-Jahres-Rendite aber auf deutlich über 3,00% steigt, wäre das beispielsweise bullisch für Gold.

    From http://www.goldseiten.de/artikel/351791–Wann-sind-steigende-Renditen-bullisch-fuer-Gold.html

    When is the us bonds interest rate bullish for gold?When the long time US Bond interest rate is higher then the short term us Bond interest rate.

    For example:

    2 Years US-Bonds 2% and 10 Years Bonds 3,5%.In the moment, we don’t see that.

    • Higher interest rates with 20+ T debt ain’t gonna happen. Real rates are and have been negative for a long time now, so this is just a bunch of B.S. IMHO. Did Draghi increase rates? Same thing. Being overindebted (entire world) and high interest rates just don’t rhyme – go ask Greece or Italy for that matter).

  7. silverfreaky | October 31, 2017 at 8:19 am |

    Or the real inflation runs away from the interest rate.

  8. Useless data as price is only determined by comex paper exchanges.

    • DisappearingCulture | October 31, 2017 at 11:10 am |

      It is not useless data, but the prices are controlled by COMEX paper/digital exchanges…for as long as that will last…and gold bugs shouldn’t hold their breath.

      • I has been this way for decades and I do not see anything now which can this to continue for many more years (forget chinese eunuchs)…

        • DisappearingCulture | October 31, 2017 at 4:14 pm |

          Really it has been this way since the last quarter of 2012 [10/1/2012 gold $1,780] when the modern computer algos & other technology [and collusion] smashed the gold/silver run up in price. Since then, increasing “contract” leverage has had to be applied to drop valuations in dollars, and prices rebound quickly, particularly in gold. But they remain range-bound. How long is anyone’s guess.

  9. OutLookingIn | October 31, 2017 at 9:09 am |

    The GFMS gold report and it’s sister the silver report are HIGHLY SUSPECT.
    Using, or under reporting data as they see fit.
    As reported many times by Koos Jansen on his BulionStar blog.

  10. So what. Gold production in Chin falls 10%. Did Gold spike to $2,000 due to a lack of supply?
    No the world is awash with Gold. This report is just another case of trying to make something out of nothing. All the reports of imminent disaster and an oil disaster have come to nought.

    • Bruce Gregory Bell | October 31, 2017 at 5:05 pm |

      How much do you have? Awash? Of the thousands of people I know, only 3 have any and all have less than an ounce. Of all the gold ever mined, there’s only 3/4 ounce per person today.

      • If you want to buy Gold you don’t have any trouble. You can buy as much as you want.

        To say Gold is scarce is wrong. There is more than enough supply to meet demand. 180,000T sitting around in various forms. Even in 1980 you could easily buy Gold as long as you had the money.

        • If you are looking at something scarce try Bitcoin. Only 16.6M currently available and can’t have more than 21m.

          Let see with 6 billion people that means only 1/361 Bitcoin per person currently or no more than 1/285 Bitcoin per person when they have been all mined.

          • “You can buy as much as you want”.
            BINGO! Nailed it.
            Everything has a price, its finding that price point which is ticklish. Over valued? Under valued? No one really knows any longer.
            Interest rates use to set valuation levels. They no longer apply, since manipulated artificially lower, along with massive printing.
            Bitcoin depends upon computer systems and are therefore a counter party to ownership. Physical gold has NO counter party.

  11. Steve: Kindly take note that you say China production falls 10% Note that no one gives a rats butt! Reading what you just posted is good 10 years out not now. There is more than enough gold above ground to satisfy all needs. It is like the stock market crash. There is too much value in stocks. The DOW may see a 10% correction this year or next but a “collapse” is hype and all your readers know it. AT&T is not worthless nor is Apple nor is Amazon and on and on. Your news is always 10 to 20 years premature. You say I don’t get it but check your last 7 years of prognostications and see that silver has gone up fractionally. The rich are
    not stupid. If you were right there would have been buyers gobbling up every ounce. Joe

    • Well said Joe, Steve’s essays, over the last 10 years, predicting financial calamity and energy EROI collapse have come to nought.

    • Gold and silver are for hedges now. Lithium, nickel, and copper is needed for electrics like cars, plenty of silver will be mined when that copper comes out of the ground, and at these prices, not even silver mines or gold mines would be shut.

  12. They are buying mines. Buy the mine you own the gold now. Make the public buy the rest of the world’s gold. No brainer. This is China they don’t just want gold, they want all the gold. Just my two cents.

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