Gold was the center of attention yesterday after closing at new all-time highs above $1,430 an ounce, breaking the previous record set in December 2010. Gold prices have risen over 7% since the unrest in the Middle East began at the end of January.
The turmoil in Libya and the possibility of it spreading to countries including Iran, Iraq and Saudi Arabia have thrown uncertainty and fear back into the market. In addition, inflation has historically been a catalyst for higher gold prices and the expectation of inflation around the world has been growing.
The volatility created by this turmoil and uncertainty is just short-term noise and we caution investors to not get overly wrapped up in the day's news cycle. Investing from headline news will only have you chasing short-term performance.
That said, gold's long-term trends are very positive. One of the strongest drivers of higher gold prices is supportive supply/demand fundamentals. Overall gold demand grew 9% to a 10-year high in 2010, while mine production only managed a 2% increase.
Gold-producing mines can be found all over the world. The list of the top producers includes one of the most underdeveloped countries in the world (Ghana) and economic powerhouses such as the United States and China.
Take a look at our new Global Gold Mining Production Map. The interactive display digs deeper into the top 10 gold-producing countries. By clicking on each named nation, you'll see the production from 2003 through 2009 (the most recent official statistics) and key factors related to gold around the world. Some countries have had their production decline over the past five years, while others have seen significant increases.
Leading the countries is China, which has increased its gold output over 90% since 2000. From 2007 through 2010, the country wrestled away the title of "world's largest gold producer" from South Africa and hasn't looked back since.
South Africa's story is the exact opposite. Plagued by labor issues, rising electricity costs, mine safety considerations and lower ore grades, the country's gold production has fallen significantly since peaking in 1970.
Last year, Australia retained the world's second-largest producer of gold, with output rising 17% to its highest level in seven years.
How well do you know the countries that mine gold?
Frank Holmes is CEO and chief investment officer of US Global Investors. This first appeared in his Frank Talk blog.