Precious metals and minerals
“Who holds the gold, makes the rules”
- Golden Rule
Today the major precious metals in the market, having also with strategic value and use, are gold, silver, platinum and palladium. Among other minerals, the diamonds are the most valuable.
Gold
China is number one and Russia is the third-largest producer of gold globally, the US holding the fourth position. The Russian government has purchased two-thirds of all the gold mined in the country, buying it from local banks, as the Kremlin sees the precious metal as a safe haven at a time of geopolitical turbulence. Both China and Russia have announced the plans to enlarge strongly the national production of gold and also start joint mining projects in Russian Far East and Siberia.
Monetary gold
“Gold represents the ultimate form of payment in the world”
- Alan Greenspan
Monetary gold is still one of the most important parts of the national reserve assets of any sovereign country and obviously one of the key investment assets.
(source: US Global Investors)
With the largest official holdings in the world, the US lays claim to nearly as much gold as the next three countries combined. It also has the highest gold allocation as a percentage of its foreign reserves at 79 percent. From what we know, the majority of the US gold is held at Fort Knox in Kentucky, with the remainder held at the Philadelphia Mint, Denver Mint, San Francisco Assay Office and West Point Bullion Depository.
The Russian Central Bank has been the largest buyer of gold for the past seven years and overtook China in 2018 to have the fifth largest reserves. In 2017, Russia bought 224 tonnes of bullion in order to diversify away from the US dollar, as its relationship with the West has grown chilly since the annexation of the Crimean Peninsula in mid-2014. To raise the cash for these purchases, Russia sold a huge percentage of its US Treasuries.
In the summer of 2015, the People’s Bank of China began sharing its gold purchasing activity on a monthly basis for the first time since 2009. Although China comes in sixth for most gold held, the yellow metal accounts for only a small percentage of its overall reserves – a mere 3.4 percent. China has been on a gold buying spree since December 2018 – buying almost 100 tonnes from then through August 2019.
Silver
Silver is a metal with a variety of applications. It is technically classified as a precious metal but it has many industrial uses and is used in a variety of technologies and products, in jewelry as well as investment assets.
Platinum and palladium
These metals are used in catalytic converters of automobiles, in many electronic applications, in jewelry as well as investment assets.
Natural Diamonds
World Natural Industrial Diamond Mine Production and Reserves: Russia, Australia and Congo were the biggest natural diamond producers.
World Resources: Natural diamond deposits have been discovered in more than 35 countries. Natural diamond accounts for about 1% of all industrial diamonds used; synthetic diamond accounts for the remainder. At least 15 countries have the technology to produce synthetic diamond.
Synthetic diamond production far exceeds natural industrial diamond output. Worldwide production of manufactured industrial diamond totaled at least 14.6 billion carats in 2019; the leading producers included China, France, Ireland, Japan, Russia, South Africa, Sweden, and the United States.