Keynote Address: Creating new industrial markets for gold - Background

Within the context of the overall gold market industrial demand plays an important role. Industrial demand for gold was 430 tonnes in 2008, approximately 12% of total end-user consumption. The dominant consuming industry in this market for gold remains the electronics sector, consuming an estimated 300 tonnes, primarily through the use of gold bonding wire for computer chips and plated contacts and connectors. Substantial demand also derives from dental applications, with other smaller industrial markets and decorative uses of the metal (non-jewellery) constituting the balance. In each market gold faces tough competition from alternative lower cost materials, such as silver and copper (electronics) and ceramics (dental). As well as the obvious benefits to the gold market resulting from this constant physical demand, there are an umber of additional positive factors concerning the use of gold in industrial applications: ?Price inelasticity: demand for gold from the major consuming industries has so far proven to be relatively robust in the face of significant increases in gold price. ??Stickiness?: the gold consumed by industrial uses tends not to return easily to the market (i.e. the demand is ?sticky?) because it is highly dispersed. ?Image: the beneficial environmental and medical applications of gold (e.g. gold used in the treatment of prostate cancer and in purification of contaminated water) are helpful to the positive image of gold. ?Added-value: new industrial uses for gold can create substantial added value in the supply chain, particularly in gold producing countries.