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Visualizing Gold Investment Compared to Global Assets

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gold investment vs other assets

gold vs. other assets

How Gold Compares to Global Assets

Gold has been a vital asset for investors and speculators to hedge against uncertainty and currency devaluation, but today it is just a small part of the investment landscape.

While gold investment holdings stand at $1.1T, this figure is dwarfed by various other global assets and funds.

This graphic compares the size of gold investment holdings to global assets, highlighting the difference in dollars invested, and where modern day investors have (or haven’t) been allocating their money.

Gold vs. Global Assets

Despite amounting to over $1 trillion dollars, gold investment holdings are a small fish in the large pond of major global assets.

Largely outsized by private equity funds, hedge funds, and more, gold has taken a backseat for today’s investors when it comes to where they allocate their capital.

AssetValue
2020 Gold Investment $90.0B
Total Gold Investment Holdings$1.1T
Top 10 Global Private Equity Funds$1.9T
U.S. Hedge Funds$3.1T
Sovereign Wealth Funds$7.9T
10 Largest Investment Banks$32.3T
Global Pension Funds$49.3T
30 Largest U.S. Mutual Funds$59.0T

Sources: Mutualfunddirectory.org, Willis Towers, relbanks.com, swfininstitute.org, barclayhedge.com, investopedia.com, CPM, Incrementum AG

Even with 2020’s large inflow of gold investment worth $90 billion, gold investment remains small on the scale of the world’s financial assets.

With its fairly small market, around 90% of gold’s global trading volume flows through three major exchanges, with the remaining volume coming from smaller OTC and secondary markets.

The Major Gold Exchanges Today

Although gold investment has been overtaken by other global assets, it still remains an important investment asset and has one of the most active markets in the world. Gold markets are split among three primary trading hubs which transact millions of dollars in volume every day.

  • London Metal Exchange (LME): Established in 1877, the LME offers futures contracts for metals including gold.
  • COMEX: A division of the Chicago Mercantile Exchange (CME) COMEX offers physically settled gold futures and options contracts.
  • Shanghai Futures Exchange (SHFE) and Shanghai Gold Exchange (SGE): While relatively young, these two exchanges have captured a large amount of gold trading volume, with the SGE being the largest purely physical gold spot exchange in the world.

Gold Exchange Trading Volumes

Gold ExchangeFY 2020 Trading Volume
London Metal Exchange (LME)$160M
COMEX$54.4B
Shanghai Futures Exchange (SHFE)$6.19B
Shanghai Gold Exchange (SGE)$6.22B

Source: World Gold Council

These three hubs and four exchanges host the majority of the world’s gold trading, and saw ~$67B worth of gold trading volume in the fiscal year of 2020.

ETFs are Making Gold Investment Accessible

While the exchanges mentioned above transact millions of dollars worth of gold a day, gold-backed ETFs have made gold more accessible to the everyday investor. The top 3 U.S.-traded gold ETFs have more than $94B in assets under management between each other.

These ETFs offer investors one of the easiest ways to get gold exposure in their investment accounts, and see billions in flows every year.

Quarterly Gold ETF Flows

RegionQ1 2020Q2 2020Q3 2020Q4 2020Q1 2021Q2 2021
North America$6.8B$18.2B$11.8B-$5B-$8.1B$1.1B
Europe$8.1B$4.4B$3.4B-$2.1B-$2.4B$1.6B
Asia$0.7B$0.5B$1.2B-$0.3B$1B-$0.1B
Other$0.3B$0.5B$0.4B-$0.3B$0.1B-$0.1B
Total$15.9B$23.6B$16.8B-$7.7B-$9.4B$2.5B

Source: World Gold Council

Last year saw record inflows into gold ETFs, as investors sought a safe haven for their capital during the COVID-19 pandemic. However, gold ETFs have seen an overall outflow of $6.1B in 2021 so far, with North American gold ETFs seeing $402M in outflows just this July.

At the same time, European gold ETFs have seen a recent rise in inflows, highlighting a divergence in sentiment between the two regions. In the month of July, European gold ETFs saw $999M worth of inflows, with Asian gold ETFs also registering positive inflows of $54M.

Central Banks Still Believe in Gold’s Future

While gold is not attracting immediate investment flow into ETFs, the world’s central banks still maintain large amounts of their reserve assets in gold. While they primarily hold gold to hedge against currency depreciation and to diversify their reserves, gold has proved an incredibly valuable investment for central banks over the decades.

Some central banks like the U.S., Germany, and Italy, have more than 50% of their reserves’ dollar value in gold, showing truly how much they value the precious metal.

With the world’s central banks holding around $1.69T worth of gold in their reserves currently, gold remains an essential investment for both big and small players alike.

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Real Assets

Visualizing the Genealogy of Exploration Success

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Mineral Exploration Success

Visualizing the Genealogy of Exploration Success

In the last decade, 63% of all mineral discoveries in the Western world were made by junior explorers. These small companies are the vision of a dedicated few.

It is the people that make a great company, and it is great explorers that make great discoveries. This infographic sponsored by SKRR Exploration shows the incredible experience and knowledge of two leaders in mineral exploration brought together in one new venture.

Two Paths to Exploration Success

According to the common adage, overnight success stories take a long time. Ron Neolitzky and Ross McElroy have traveled two different paths but along their route, they have uncovered vast amounts of mineral wealth in Canada.

Ronald Netolitzky Ross McElroy
  • 1964-67: Graduated from the University of Alberta with a B.Sc and M.Sc. in Geology.
  • 1985: Became President of Delaware Resources and acquired the Snip property.
  • 1986: Struck a gold discovery at the Snip property, which produced 1Moz of gold over its lifetime.
  • 1988: Invested in Consolidated Stikine Resources and drill-tested Eskay Creek, which would go on to produce 3.3Moz of gold and 160Moz of silver over its lifetime.
  • 1990: Sold Eskay Creek stake to International Corona for $67/share as part of an acquisition.
  • 1990: Received the Bill Dennis Prospector of the Year Award.
  • 1993: Purchased 100% of the Brewery Creek property as president of Loki Gold.
  • 1996: Transformed Brewery Creek into a heap-leach operation.
  • 1996: Merged Loki Gold with Baja Gold and Viceroy Gold to create an entity with an annual production of 200Koz of gold.
  • 1996: Received AME’s E.A. Scholz Award for discovery and development achievements.
  • 2003: Acquired the Galore Creek property for Spectrum Gold, later merged with NovaGold Resources and partially sold to Teck Resources for $275M.
  • 2007: Oversaw Yamana Gold’s $577 million acquisition of Viceroy Resources as chairman.
  • 2010: Oversaw Osisko Mining’s $372 million acquisition of Brett Resources as chairman.
  • 2015: Inducted into the Canadian Mining Hall of Fame.
  • 1987: Graduated from the University of Alberta with B.Sc. in Geology.
  • 1987: Joined uranium giant Cameco and worked on the McArthur River discovery in Saksatchewan’s Athabasca Basin, which is now the world’s largest uranium mine.
  • 1989: Worked with French nuclear Company Cogema (now Orano) on the Shea Creek uranium discovery in Saskatchewan, Canada.
  • 1990-99: Managed the Hope Bay Gold Project with BHP Minerals, discovering three high-grade gold deposits.
  • 2007: Joined Fission Energy as VP of Exploration before rising to the rank of COO.
  • 2009: Led the technical team that discovered the high-grade J Zone uranium deposit at Waterbury Lake and sold to Denison Mines.
  • 2012: Used airborne radiometrics and radon in-lake survey technology to discover the Triple R uranium deposit on the Patterson Lake Property, with an indicated resource of 102M lbs of U3O8.
  • 2013: Received the Mining Person of the Year Award from the Northern Miner.
  • 2014: Received the Bill Dennis Award for a Canadian discovery.

This combined experience is coming to bear in one company to uncover Canada’s next mineral frontier.

Bringing Experience Together: SKRR Exploration

SKRR brings together the experience of two great explorers to uncover the next mineral frontier, Saskatchewan. This junior explorer is working on the next great discovery with 6 projects in the Trans-Hudson geological corridor

  • Father Lake Nickel Project: Copper, Nickel
  • Ithingo Project: Gold
  • Irving Project: Gold
  • Cathro Project: Gold
  • Leland Project: Gold
  • Olson Project: Gold
  • Manson Bay: Gold

With a proven location and legacy of exploration success, SKRR is ready to unlock the next mineral frontier in Saskatchewan and continue the tradition of a dedicated few uncovering the next great discovery.

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Real Assets

The World’s Top 10 Gold Mining Companies

Together, the world’s top 10 gold mining companies account for roughly 22% of the share of the total gold market.

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Top 10 Gold Mining Companies

The World’s Top 10 Gold Mining Companies

Unlike paper currency or many other types of assets, gold has maintained its value throughout the ages.

First used by cultures in modern-day Eastern Europe in 4,000 BC to make decorative objects, the metal today represents a global business with operations on every continent, except Antarctica.

The industry is dominated by a select group of majors.

Together, the world’s top 10 gold miners produced 27.48 million ounces (Moz) in 2020, worth approximately $48 billion, according to data from Mining Intelligence.

North America Leading

At a country level, China is the largest producer in the world accounting for around 11% of total global production.

However, no Chinese company appears among the top miners.

RankCompanyHeadquartersCountry2020 Production (Moz)
1Newmont DenverUSA 🇺🇸5.88
2Barrick GoldTorontoCanada 🇨🇦4.84
3PolyusMoscowRussia 🇷🇺2.87
4AngloGold AshantiJohannesburgSouth Africa 🇿🇦2.81
5Kinross GoldTorontoCanada 🇨🇦2.38
6Gold FieldsJohannesburgSouth Africa 🇿🇦2.13
7Newcrest MiningMelbourneAustralia 🇦🇺2.06
8Agnico EagleTorontoCanada 🇨🇦1.73
9Polymetal InternationalSt. PetersburgRussia 🇷🇺1.40
10Harmony GoldJohannesburgSouth Africa 🇿🇦1.38

At the top of the gold mining companies list, Colorado-based Newmont has ownership of mines in Nevada, Colorado, Ontario, Quebec, Mexico, the Dominican Republic, Australia, Ghana, Argentina, Peru, and Suriname.

As the only American company on the list, Newmont produces 21% of the yellow metal poured by the top companies.

Canada, which is known for its mining industry, has three companies on the list; Barrick Gold, Kinross Gold, and Agnico Eagle, producing 32% combined.

Russia, which is expected to become the world’s top producer by 2029, has two companies ranked. Together, Polyus and Polymetal represent 15% of the top miners’ production.

The top 10 players account for ~22% of the total market share, which is anticipated to grow due to increased merger and acquisition activities.

Wealth and Luxury

Over six and a half thousand years after its discovery, more than 90% of the gold mined annually is destined for jewelry, bullion, and coins.

  • Jewelry: 36.83%,
  • Investment: 46.64%,
  • Central banks: 8.58%,
  • Technology: 7.95%

The metal is also used in dentistry, as it is the best material for fillings and crowns since it is easy to insert, and is non-reactive with the human body.

Golden Future

Global production fell by 1% in 2020, the first decline in a decade, according to the World Gold Council.

Some analysts argue the world has reached “peak gold” – which means that the maximum rate of extraction has passed and the production of the metal will continue to fall until, eventually, mining for it shall cease entirely.

Demand, however, shows no sign of slowing down as the golden metal remains firmly synonymous with security, stability, and longevity.

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