Summary

The global gold market is multifaceted, encompassing chemical properties for industrial uses, its value in jewelry making, and importance as a form of investment and currency. It's a concentrated market with high production costs and major players like China, Australia, and Russia leading in both reserves and output. Despite Africa housing 40% of the world's gold reserves, its market is volatile with South Africa as the leading producer on the continent.

The COVID-19 pandemic caused a substantive drop in gold demand. The price of gold, while having historically risen, particularly during the financial crisis, fluctuates based on economic conditions, supply-demand balances, and financial market speculation. In France, activities are more focused on gold trading, recycling, and processing, given the decline in domestic mining. The jewelry sector is the primary consumer of gold, followed by investments and central bank demands. In terms of distribution, different channels prevail for all-gold, diamond-set, stone-set, and gold-plated jewelry. While the price of an ounce of gold rose until a peak, it has since fallen but remained above its pre-crisis levels, influencing gold collection and recycling industries such as France's Gold by Gold.

Market Analysis: Dynamics and Trends in the French Gold Sector

In examining the market trends within the French gold sector, there are several notable dynamics worth discussing. France, although not a significant gold producer, has shown resilience and creativity in its gold industry, particularly through the recycling and processing of gold. With France's imports of precious metals, specifically gold, having surged from between €940 million and €950 million to almost €1.4 billion, the upwards trajectory is clear. 

The French jewellery sector is an essential component of the country's gold market. Despite a decrease in gold used in jewellery manufacture from 12 tonnes  to 5.8 tonnes, the demand for gold jewellery remains robust among the French populace. It's worth noting the renaissance in jewellery manufacturer's sales , which saw an increase from an index of 103.6 to 137.5.

When it comes to exports, France's performance in the jewellery sector is commendable. The value of jewellery exports stood at a notable 7.3 billion dollars, with Switzerland and the United Kingdom being the primary recipients of these exports. Delving further into domestic preferences, rings command the most significant slice of the French market, with between 60% and 65% of French individuals claiming they wear them. When considering sales distribution, it mirrors the same affinity, with rings constituting close to half of all jewellery sales.

In terms of the electronics sector, gold's role cannot be understated due to its properties making it ideal for producing a variety of electronic components. The French electronics industry, which involves a broad spectrum of activities from electronic component production to embedded software development, has remained internationally competitive and innovative. This sector accounted for close to €15 billion in turnover, with a projected upward trend. Turning to the gold production processes, it's clear that gold mining is a complex operation with major environmental and political implications.

France has a history of gold mining, but economically viable reserves depleted in the early 2000s, leading to the closure of significant mines such as Salsigne near Carcassone. Despite this, France has a history of notable gold output, reaching peaks of around 3000 kg in the early 20th century.

Key Players Shaping the Multifaceted Gold Market Landscape

The gold market is a complex and interconnected network of industries and sectors, from raw materials to jewelry and financial investments. Here's a closer look at some of the notable players operating within this golden tapestry:

  • Mining Giants and Producers: The Bedrock of the Gold Industry - At the very heart of the gold industry lies the mining and production companies. Africa, with countries like South Africa, Ghana, Sudan, and Mali, plays a significant role in global gold reserves and production, with South Africa being the leading producer on the continent. Internationally, Australia stands as a powerhouse, contributing a sizeable portion to world gold production with over 270 tonnes annually.

  • Jewelry Connoisseurs: Artisans of Luster  - As the precious metal transitions from ore to ornamentation, the role of jewelers becomes paramount. Crafting beauty from the raw, the jewelry industry is essential for gold's enduring charm. Companies like SMAAP and Gold by Gold thrive in the realm of gold recycling and processing, turning discarded pieces into gleaming treasures anew.

  • Refiners and Recyclers: The Alchemists of the Modern Era - In a cycle of renewal, refiners and recyclers such as Gold by Gold play a critical role in the supply chain. These companies facilitate the transformation of gold from used and discarded forms back into pure, market-ready material, contributing to a sustainable gold economy.

  • Retail Innovators: Bridging the Gap to Consumers - Retail networks such as Or en Cash and Le Comptoir National de l'Or are expanding rapidly, often via franchises, offering customers opportunities to buy, sell, and appreciate the value of gold. Their presence is a testament to the precious metal's enduring allure among individual consumers.

  • Financial Heavyweights: Gold in the Realm of High Finance - As gold also functions as a financial asset, gold producers are ever-aware of the influence of the "paper gold" market, which comprises speculators and investors in financial instruments backed by gold. This side of the market remains crucial as it affects pricing and demand for physical gold.

  • Sector Specialists: Niche Experts in Gold Applications - Small French companies steeped in artisanship find their niche in a specific segment of the precious metals market, operating within the realm of arts and crafts, further diversifying the applications of gold.

Each of these players contributes to the grand mosaic of the gold market, interwoven by their unique roles yet collectively they influence the global perspective on gold.

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  • Last update : 07/10/2021
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Summary and extracts

1 Market overview

1.1 Introduction

Gold can be defined in different ways. It is both a chemical element (atomic number 79, symbol Au), a precious metal used for its colour and its ductile and soft material unalterable to water and air and a valuable item became a currency in ancient times. These three definitions of gold correspond to the three most important uses of gold:

  • The chemical element where the material gold has applications in several industrial sectors;
  • The precious metal is essential to the jewellery industry;
  • The valuable object is the object of hoarding, investments, financial investments.

The gold market therefore includes several sectors of activity, from the most material (gold mining, processing, industrial use, jewellery) to the more intangible (financial market speculation). The gold market is therefore a very concentrate which is made up of the businesses surrounding the raw material (mining, gold production) but also all the players who derive directly (jewellers, jewellers) or indirectly (stock market speculation) from the underlying asset.

Through the production of gold, the entire gold industry is adapting to changes in the price of an ounce of gold, as it has always been a countercyclical safe haven. Nevertheless, the entire industry must adapt to new rising production costs, which are expected to have a significant impact on market growth. In addition, gold producers are facing the stock speculation (the "paper gold" market) and try to find alternatives in order to maintain price levels that reflect the reality of supply and demand and not the speculation of certain players. The gold production sector is highly concentrated because the barriers to entry are high, especially to operate gold mines. Production costs are increasingly high, forcing players to produce very large volumes to be profitable.

Africa holds 40% of the world's gold reserves. It is therefore a rich continent with great potential. The African gold market is worth more than $65 billion and South Africa is the leading producer country in Africa and the 7th largest in the world, with 140 tons produced in 2016, despite its declining power (it is followed by Ghana, Sudan and Mali). Gold accounts for 70% of Mali's export earnings and the 2nd largest contributor to GDP. The second-largest gold producer in the world behind China and before the United States, Australia is the global leader in industrial mineral resources, with an average annual production of over 270 tonnes of gold, representing 20% of the world's gold production.

In France, several players are positioned on this market. While large-scale players are active in the gold mining segment, more and more players are moving into the segment of gold trading with individuals. In France, for example, players such as Gold by Gold and SMAAP generate most of their turnover in the gold recycling and processing segment. Trading networks, such as Or en Cash or Le Comptoir National de l'Or, are also increasingly present, thanks to a rapidly developing network of franchises.

Despite being a safe haven, the COVID-19 crisis has had a negative impact on the gold market. Indeed, the gold market did not withstand the health crisis: the demand for gold experienced a decline of almost 28% in the fourth quarter of 2019. The gold market has not seen such a large contraction in demand since the 2009 financial crisis, marking the unprecedented nature of the COVID-19 crisis. 

List of charts

  • Countries with the largest gold mine reserves
  • World gold production
  • Major gold-producing countries
  • Global gold demand
  • French imports of precious metals
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Latest news

A group of investors takes over the Gold Service brand - 21/11/2022
  • 26 stores, including 15 in France
  • some sixty employees
  • annual sales of 50 million euros
  • Objective: double sales over the next three years and become European leader within five years
Amiens: opening of the Comptoir national de l'or - 02/09/2022
  • Business: buying and selling of precious metals, jewelry, gold and silver coins and bars
  • Transaction basis: real-time yellow metal prices
  • Network creation: 1976
  • Number of branches in France: over 70
  • Number of branches in Germany: 2
  • Target: 80 sales outlets by 2023
  • Appraisals in 20 years: hundreds of thousands of jewels

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

Barrick Gold Corporation
Newmont Mining Corporation
Anglogold Ashanti Ltd
Heimerle & Meule Group
Heraeus
Aureus
Gold by Gold
Lingor
Cookson Métaux précieux (Heimerle & Meule Group)
Dauvet
Or à Décor
Gold Service

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