A few weeks ago I made the point that gold is not in a bubble by saying that something less than 1% of all Americans have a significant position in gold. To that point, I recently put together some actual numbers to prove it.
Enjoy.
According to the USGS, American consumption of gold in 2009 (in general) was 5.44 million ounces. That’s total – including wedding bands, other jewelry, electronics – and bullion. http://minerals.usgs.gov/minerals/pubs/commodity/gold/mcs-2010-gold.pdf
If even 1% of Americans bought one ounce of bullion last year, it would account for 3.1 million ounces or 75% of that 5.44 million total.
But, the USGS also tells us that in 2007, only 4% of gold was minted into coins – (2007 is the latest published usgs yearbook for gold).
Total (world) gold fabrication was 3,070 tons, while coin fabrication only weighed in at just 137 tons, or something like 4% of total production. http://minerals.usgs.gov/minerals/pubs/commodity/gold/myb1-2007-gold.pdf
Assuming all 137 tons of the coins minted in 2007 were bought by Americans, it would be 4 million ounces, or just over the 1% number I quoted before. But of course, Americans didn’t snatch up EVERY gold coin minted in 2007, nor did they in 2009. I’ll be generous and say that coin production doubled in 2009 to 8 million ounces and I’ll be generous again and say that Americans bought 33% of all coins minted, or 2.66 million ounces. That’s still less than 1%. You might make the argument that people buy coins in increments smaller than 1 ounce, but over 75% of all gold coins are of the one ounce variety, so there’s not much leeway in that regard.
To recap – Americans consumed 5.44 million ounces of gold last year. Historically, something much less than 10% of all gold is minted into coins in a given year. If 1% of Americans bought just one ounce of gold bullion, it would account for 75% of our consumption – and wipe out nearly all of world coin production.