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DOLLAR HIGHER, GOLD FUTURES PRICES DECREASING

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Gold futures prices fell along with the strengthening U.S. dollar against the euro so eroded the demand for gold as an investment alternative. Gold futures contract for February delivery fell 0.1 percent to 1596.70 per troy ounce (equivalent to 31.1 grams) at 1:59 PM at the Comex in New York on Monday (19/12/2011) local time.

The strengthening U.S. dollar not the euro zone because of the condition is still bad. European Central Bank President Mario Draghi said, a substantial risk to the economy of Europe is still there. The euro also fell 0.5 percent. It will take much time for investors to regain confidence in gold as a protector of the crisis, given the magnitude of shocks in recent years.

Nevertheless, Andrey Kryuchenkov, an analyst at VTB Capital in London, Monday, remained optimistic gold will perform well in the long run. “Gold will suffer from the recent turmoil because of the liquidity of U.S. dollars, but in the long run gold will remain solid,” said Kryuchenkov.

According to him, an accommodative monetary policy in the world will continue to secure the role of gold as an inflation protector.

3 BIGGEST GOLD PRODUCING COUNTRIES

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The surge in gold prices is not only influenced by the high demand. However, from the supply side also tends to decrease.

In fact, world gold production from year to year tends to fall. Last year, gold production is slightly better than 2008. But, it still can not exceed the highest production in 2001, as many as 2,600 tons.

Data U.S. Geological Survey (USGS), shows that gold production up 2.26 tons to 2350 tons in 2009. This production is 9.6 percent below its peak in 2001.

Thomas Chaize, gold watchers of GoldSeek.com, as quoted by VIVAnews, Monday, October 4, 2010, observed that the decline in production has made the price of gold soared. Within a decade, the price of gold rose from U.S. $ 275 per ounce to more than U.S. $ 1,300 this month.

1. China
For three consecutive years, China is the world’s largest gold producer. It beat the previous record. China’s gold production rose 285-300 tonnes from 2008 to 2009.

China’s gold production increased by 62 percent since 2001 while world production fell by 9.6 percent during that period.

Not only as a producer, China is also famous as a gold hunter. China secretly accumulate gold since 2003. In the period 2003-2009, at least 454 tonnes of gold have been absorbed by China.

2. Australia
Australia became the second largest gold producer in the world with 215 tons in 2009. Their gold production fell 2.3 percent compared to 2008, peak production of Australia.

Australian gold production ranking continues to rise from fourth to second, but not because of increased production due to decline more slowly than South Africa and the United States.

3. South Africa
South African gold production continued to fall just half since 2001 to 2009. In 2001, South African production reached 402 tons. While in 2009 only 210 tons, or fall 2008 at 213 tonnes.

With a very rapid decline in production, South Africa has lost the number one spot in 2007 to number 3 in 2009.

In addition to its reserves are depleted, the South African gold production decline in 2008 and 2009 as well as electricity supply problems.