FUTURE TRENDS IN GOLD PRODUCTION

Abstract

SUMMARY It is desirable and important in the discussions on international monetary arrangements to assess the future trends of gold production under different assumptions. The article reviews past gold production, showing that there has been a large increase in physical gold production in the Free World, but despite the addition of substantial Russian sales, the increments to official monetary stocks has dwindled to nothing, because of the increasing amounts added to unofficial stocks. In the absence of any price change Free World gold production is likely to fall rapidly after 1971, and with the propensity to add to hoards unchanged official monetary stocks are likely to fall. With a revaluation of gold through doubling its price adequate increments to official monetary stocks are likely to be available from new production and releases from unofficial stocks until after 1980, after allowing for the resumption of hoarding in the traditional fashion. There is no reason to believe that with an adequate price adjustment gold production will not be sufficient to feed official monetary stocks.