Experts in gold are convinced gold will continue to increase over the long-term. For the meantime, it will respond quickly to economic tremors and fluctuating gold prices. Recycling experienced a seven-year slump last year and will probably remain low for the rest of 2015.
The World Gold Council (WGC) said stakeholders in the gold recycling industry are currently confronted with complicated challenges although opportunities are also plentiful. Challenges refer to stiff competition and congestion. Increased volumes of discarded electronic and electrical items offer considerable opportunities for industrial material reprocessing although waste related to gold comprise only two percent of total surplus volume.
Observers see reuse of gold as remaining restrained after dropping to a seven-year low in 2014 due to low-key prices and recovery of the world economy.
Recycling is considered a vital source of gold in the industry supply chain.
It contributed on the average one-third of the market’s gold in the last 20 years until the end of last year based on reports from the WGC and Boston Consulting Group.
Gold recycling peaked in 2009 with 1,728 tons processed metal processed and made up 42 percent of international market supply. However, these volumes shrunk as the price diminished and countries started to recover from the 2008 downturn, the report revealed.
It went down to its lowest since 2007 at 1,122 tons or 26 percent of aggregate supply.
Collective amount of mined gold was estimated to be 176,000 tons.
At the peak of the global financial crisis in 2009, cash-for-gold shops suddenly sprouted particularly in the United States contributing to flows of recycled gold during the same year. Yet, these outlets closed down as economies got better and prices softened.
From 2008 to 2009, recycling increased 25 percent triggering the rationale that economic crises bolster gold recycling.
Nonetheless, price of the commodity still is the main driver for reprocessing and accounted for 75 percent of the yearly change in volumes. Recycled gold quantities go up 0.6 percent for every one percent price increase in a single year.
The contribution of Western nations to recycling has gone up to 43 percent of the world’s reused gold four years ago which is up from 27 percent in 2004.
A projected 86,000 tons of gold come in the form of jewelry and the volume transformed into gold jewels increased between two and nine percent since 1982, based on an in-depth study made by the WGC.