Gold's contribution to the global economy: $110 billion in 2012

Gold may not look good on the stock markets this year, but its impact on the global economy is undeniable: A recent report by PricewaterhouseCoopers, commissioned by the World Gold Council, shows that consumer demand for gold in the form of jewellery, coins or small bars contributed $110 billion to the global economy in 2012.

Overall, the gross value added (GVA), including indirect GVA, "associated with the supply of and demand for gold is estimated to be in excess of US$210 billion across those countries in scope of this analysis," the report reads.

The 15 largest gold producing countries accounted for about three-quarters of global output.

"The six largest producers, China, Australia, the United States, Russia, Peru and South Africa, extracted more than half of the gold mined globally," the report reads.

Gold mining directly generated US$78.4 billion of economic output in 2012 – equal to the GDP of Ecuador or Azerbaijan.

Meanwhile, the 13 biggest gold consuming nations in 2012 accounted for 75% of gold used for fabrication and 81% of gold used for jewellery, coins and small bars.

A closer look at why people are buying the yellow metal shows that investment demand tells only a small part of the story.

Demand for gold

Demand for gold | *Investment demand includes bar and coin and gold-backed exchange traded funds (ETFs)

This is the first time a report addresses the direct economic impact of gold on the global economy, according to PwC, and it comes at a critical time. Mining companies worldwide are facing severe scrutiny over labour, environmental and economic issues. Meanwhile, gold's position as a safe-haven investment has been seriously challenged this year.

"It is important to be reminded of how gold contributes so broadly to the global economy, ranging from foreign exchange earnings for gold-exporting countries to employment opportunities and tax revenues," PwC writes.

Read the full report here.