While the gold industry hasn’t had the chance to shine bright this year, a study published Tuesday reveals the sector contributed more than US$210 billion to the world’s economy in 2012, pretty much the equivalent to the GDP of Ireland, Czech Republic or Beijing.
The independent report by economists at PwC, commissioned by the World Gold Council (WGC), is the first to take into account the entire value chain from large-scale mining supply to consumer demand with the goal of quantifying how the precious metal contributes to local and global economic development.
To date, research of this kind has typically been confined to examining the value created by a particular project, event or company in a specific market segment or country.
Terry Heymann, Director of Gold for Development at the World Gold Council, said the total economic contribution of gold is likely to be considerably greater than this study of large scale gold mining indicates, if all global gold mining activity were able to be included.
Consumer demand for physical gold —mainly in the form of jewellery, coins and small bars — contributed close to $110bn to the global economy last year, shows the study.
Another key finding was the significance of gold mining to the economies of developing nations. Large scale gold mining alone, says the study, made a contribution of over $78bn to the economies of the top 15 mining countries last year, having the greatest impact in developing countries, such as Papua New Guinea (15% of GDP), Ghana (8% of GDP) and Tanzania (6% of GDP).
Since early this year, however, gold miners have been seriously hit by weak gold prices, write-downs and blowout project costs, strikes and market speculation about the U.S. monetary stimulus.
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Image: Tiffany’s windows, Fifth Avenue, NYC, from Flickr.