Gold
Gold is the one commodity where annual production barely matters. Almost every ounce ever mined still exists, so the price is set by who wants to hold the stock, not by who dug it up this year.
At a glance
- Traded as
- Refined bullion, quoted per troy ounce
- Benchmark
- The LBMA Gold Price, set twice daily in London
- World mine production
- Roughly 3,300 tonnes in 2024
- Above-ground stock
- More than 200,000 tonnes, almost all still in existence
What is actually being traded
Gold trades as refined bullion of defined purity, quoted in dollars per troy ounce - a unit of about 31.1 grams, heavier than the ordinary ounce used for everything else. The London market deals in 400-ounce Good Delivery bars held in accredited vaults; COMEX deals in 100-ounce bars.
What separates gold from every other commodity in this library is the stock-to-flow ratio. Mine production adds roughly one and a half percent to the above-ground stock each year, and essentially none of that stock is consumed. Copper gets buried in buildings; gold gets moved between vaults.
The practical consequence: a mine strike is close to irrelevant to the gold price, while a shift in who wants to hold the existing two hundred thousand tonnes is everything.
Gold is a stock market, not a flow market. Annual production is roughly 1.5% of what already exists.
What it is used for
Jewellery is the largest single use, concentrated in India and China, and it behaves partly as consumption and partly as savings - Indian household gold is bought as wealth, not as ornament. Investment demand covers bars, coins and exchange-traded funds. Technology takes a small, steady share for connectors and semiconductor bonding.
The category that changed the market in recent years is central banks. Official buying ran at record levels through the 2020s as reserve managers diversified away from dollar assets, and unlike jewellery it is price-insensitive: a central bank buying reserves does not stop because gold got expensive.
- Jewellery
- 44%
- Investment (bars, coins, ETFs)
- 24%
- Central banks
- 22%
- Technology
- 6%
- Other
- 4%
Source: World Gold Council
Where it comes from
Gold mining is the least concentrated of any commodity here. No country produces more than about a tenth of world supply, and dozens produce meaningful amounts. That diffusion is one reason supply disruptions rarely move the price.
Recycling is the other half of supply. Roughly a quarter of the gold reaching the market each year comes from scrap - old jewellery sold back when prices are high - which makes total supply notably price-elastic and dampens rallies.
| Name | Share |
|---|---|
| China | 11% |
| Australia | 9% |
| Russia | 9% |
| Canada | 6% |
| United States | 5% |
| Rest of world | 60% |
Source: USGS Mineral Commodity Summaries 2025
Behind the subscription
The rest of this entry is the part that changes a decision: what moves the price, which contract sets it, who ships it and where that can be cut off.
What moves the price
The real-rate relationship that explains most of gold's history, why it broke down recently, and the six other forces that set the price.
Where it is traded
The London vault market, the New York futures market and the Shanghai exchange - who sets the benchmark and where the physical metal actually sits.
Who ships it, and where it concentrates
Gold's chokepoint is a country most people never associate with it - and the vault map that decides where a delivery squeeze can happen.
How this shows up in prediction markets
Which gold price a question settles against, and the base-rate check that keeps a round-number threshold honest.
Included with a subscription
Create an account to unlock the full entry — price drivers, trading venues, trade flows and the live markets attached to it.
Frequently asked questions
- Why does gold rise when interest rates fall?
- Because gold pays no income. When inflation-adjusted yields fall, the opportunity cost of holding a non-yielding asset falls with them. The relationship is strong but not absolute - heavy central bank buying has overridden it for extended periods.
- Does mine production affect the gold price?
- Barely. Annual production adds around one and a half percent to a stock that is almost never consumed, so the price is set by who wants to hold the existing stock rather than by this year's output.
- Why is Switzerland so important to gold?
- It refines a very large share of the world's gold, converting unrefined mine bullion and recycled metal into the specific bar sizes each market wants. Metal often passes through Switzerland on its way from a mine to an Asian buyer.
- Is gold a good inflation hedge?
- Over long horizons it has roughly preserved purchasing power, but over any given few years it tracks real interest rates and the dollar far more closely than it tracks inflation itself. It hedges the monetary response to inflation better than inflation.
Primary sources
Related entries
Prediction markets carry real risk of loss. Nothing on Market Guy is financial advice — it is research tooling to help you think, not a signal to trade.