Erm, really?

Industrial demand for silver, including from the photography industry, is reckoned to be about 65 per cent of total global supplies estimated at 895 tonnes. For gold industrial and dental demand the figure is about 11 per cent of supplies estimated at around 3,880 tonnes, according to consultants GFMS.

OK, I realise, this is a Reuters staff report, not directly from The Telegraph.

But someone is seriously suggesting that global gold output is a multiple of global silver output?

Jeepers, someone capable of that shouldn´t be allowed near a typewriter let alone a financial reporting wire.

The gold number looks roughly right (although it´s important to understand that virgin production is a tiny part of the global gold and or silver market….recycling plus stock is many many times larger) but the silver one?

Total silver mine production reached 670.6 Moz

670 million ounces, divide by 1,000 and divide by 32 (very roughly, 32 troy ounces to a kilo, then 1,000 kg to a tonne) and I´m getting around 20,000 tonnes of silver a year.

Do people actually get paid to make these sorts of mistakes? The sorts of mistake that would be immediately spotted by anyone with even a passing knowledge of the industry?

5 thoughts on “Jeebus”

  1. Tim,

    Wasn’t there some recent Gold mining technique that made it vastly easier to ramp up gold production?

    I think a lot of gold-bugs will get stung by “inflation”.

  2. I suspect they meant 895 Moz, which is mine supply plus stock sales etc.

    ACO – Not that I know of, certainly no-ones been ramping up production of late.

  3. The reason this obvious mistake should have been spotted is that if there was that much more gold than silver, especially given silver’s usefulness in all sorts of ways, gold would be cheaper than silver. It ain’t so the numbers are obviously fucked.

    (For those who don’t know, Silver is a substantially more useful metal than gold. It’s the best conductor and it has interesting chemical properties. Gold is pretty and shiny and is good to plate electrical connectors with as it has a low contact resistance. It’s chemically inert, and it’s far too soft to be much use for anything really.)

  4. I’m not sure I totally agree. You can’t just look at supply, otherwise metals would be valued purely by their rarity. Demand also matters. And annual silver mine supply (say it’s 690 Moz) is worth about $9bn at current prices whereas annual gold supply (say 75 Moz) is worth about $70bn. Which suggests the world places a rather larger value on gold, regardless of its scarcity?

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