Gold Survey 2010 Presentation DGG Zurich · 163 163 tonnetonne increase equal to 6.8% yincrease equal to 6.8% y--oo--y in 2009; the first y in 2009; the first annual increase for

Gold Survey 2010Gold Survey 2010Gold Survey 2010Gold Survey 2010PhilipPhilip KlapwijkKlapwijkPhilip Philip KlapwijkKlapwijk

Executive Chairman, GFMS Ltd.Executive Chairman, GFMS Ltd.

Denver Gold Group Denver Gold Group –– European Gold Forum 2010European Gold Forum 2010

Zurich 15Zurich 15thth April 2010April 2010Zurich, 15Zurich, 15thth April 2010April 2010

GFMS gratefully acknowledge the generous GFMS gratefully acknowledge the generous support from the following companies for this support from the following companies for this pp g ppp g p

year’s year’s Gold Survey Gold Survey and its two and its two UpdatesUpdates

Tanaka Precious Metals Groupwww.pamp.comCommerzbank Global

Precious Metals Valcambi sa

Barrick Gold CorporationWorld Gold Council Dubai Multi Commodities Centre

JPMorgan Chase Bank

ScotiaMocatta www.newmont.comwww.IBKCapital.com www.standardbank.com

Johnson Mattheywww.nyse.com/nyseliffeus www.commodities.sgcib.comwww.ljgold.com

Kinross Gold Corporation www.randrefinery.com INTL Commodities, INC.www.natexiscm.com

The GFMS Group’s Unique Research C biliti & P

Large and experienced team of 25 Analysts + Consultants

Capabilities & Programme

Large and experienced team of 25 Analysts + Consultants.

Not just desk-based: Over 300 companies and organisations in d b l h l h36 countries visited by our personnel in the last 12 months.

Annual Gold, Silver, Platinum & Palladium and Copper Surveys.pp y

Also, weekly, monthly, quarterly & bi-annual reports plus forecasts and a wide range of consultancy services across allforecasts and a wide range of consultancy services across all the precious and base metals & steel.

For more information visit: www gfms co ukFor more information visit: www.gfms.co.ukor email: [email protected]

Presentation OutlinePresentation OutlinePresentation OutlinePresentation Outline

G ld P iG ld P i•• Gold PricesGold Prices

S lS l•• SupplySupply

DemandDemand•• Demand Demand

OutlookOutlook•• OutlookOutlook

US Dollar Gold Price US Dollar Gold Price Weekly AveragesWeekly Averages

1300 DOLLARDOLLAR 20082008 2009 2009 Q1 Q1 20102010

AverageAverage 871.96 871.96 972.35 1,109.12

900

1100

z

Intra-Year 2.7% 24.4% -0.5%

Year-on-Year 25.4% 11.5% 22.1%

700

900

US

$/oz

US$/oz

500

700

2626--week moving averageweek moving average

300J 03 J 04 J 05 J 06 J 07 J 08 J 09 J 10Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10

Source: GFMS; Thomson Source: GFMS; Thomson ReutersReuters

Euro Gold PriceEuro Gold PriceWeekly AveragesWeekly Averages

850Euro/ozEUROEURO 20082008 20092009 Q1 Q1 2010 2010

AverageAverage 593 09593 09 696 94696 94 802 51802 51

650

AverageAverage 593.09 593.09 696.94 696.94 802.51 802.51

IntraIntra--YearYear 6.9% 6.9% 21.5% 21.5% 6.1% 6.1%

YearYear--onon--YearYear 17.0%17.0% 17.5% 17.5% 15.0% 15.0%

Euro

/oz

450

E

2626--week moving averageweek moving average

250Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10

Source: GFMS; Source: GFMS; Thomson Thomson Reuters Reuters

Gold Prices in Different CurrenciesGold Prices in Different CurrenciesIndexed Daily SeriesIndexed Daily Series

130

140

0)

US$/oz

Indexed Daily SeriesIndexed Daily Series

120

130

2009

=100

Rupee 10g/g

110

(4th

Jan

Euro/kg

90

100

Inde

x (

Rand/kg

80

90 Rand/kg

Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10

Source: GFMS; Thomson Source: GFMS; Thomson ReutersReuters

Real and Nominal Gold PricesReal and Nominal Gold Prices(real US$ price in constant (real US$ price in constant 2009 2009 terms)terms)

1500

1800( $ p( $ p ))

New record nominal annual average reached in

1980 average: $1,6001980 average: $1,600

1200

1500

oz

g2009, but in real terms

today’s prices are still well short of historical peaks.

900

US$

/o

Real PriceReal Price

300

600

Nominal PriceNominal Price

0

Nominal PriceNominal Price

Source: GFMS, Source: GFMS, Thomson ReutersThomson Reuters

SupplySupplypp ypp y

GFMS’ Mine Supply DatabaseGFMS’ Mine Supply Database•• OverOver 100 companies analysed on a quarterly basis 100 companies analysed on a quarterly basis ––

production/costs/corporate activityproduction/costs/corporate activityOver 300 mines recorded on an annual basisOver 300 mines recorded on an annual basis•• Over 300 mines recorded on an annual basis Over 300 mines recorded on an annual basis ––production/costs/reserves/gradeproduction/costs/reserves/grade

•• Over 320 projects Over 320 projects –– projected production profile, startprojected production profile, start--up up date, capex, reserves, resourcesdate, capex, reserves, resources

•• Informal mine production measured on a countryInformal mine production measured on a country--byby--country basiscountry basisyy

•• Costs measured at 70% of Western World gold productionCosts measured at 70% of Western World gold production•• BottomBottom--up cost analysis methodology to assess $/tonne up cost analysis methodology to assess $/tonne

mining ore processing and onmining ore processing and on site administration costssite administration costsmining, ore processing and onmining, ore processing and on--site administration costs, site administration costs, plus benchmarking of fuel, power, labour productivity and plus benchmarking of fuel, power, labour productivity and other key inputsother key inputs

l b l l d f f l b kdl b l l d f f l b kd•• Global analysis and forecasting of mine supply, breakdown Global analysis and forecasting of mine supply, breakdown of industry cost structures and trends, benchmarking of industry cost structures and trends, benchmarking

Gold Mine ProductionGold Mine Production

3000 Australia

2009 up 163t 2009 up 163t oror 6.8%6.8% yoyyoy

North AmericaLatin America

South AfricaChinaOther

2500

3000 Australia or or 6.8% 6.8% yoyyoySouth Africa

1500

2000

nnes

1000

ton

0

500

1981 1985 1989 1993 1997 2001 2005 2009Source: GFMS (Source: GFMS (Gold Survey Gold Survey 2010)2010)

Mine Production: Winners and LosersMine Production: Winners and Losers(Fi t h i 2009 l 2008)

70

(Figures represent year-on-year change, i.e. 2009 less 2008)

Indonesia

50

60

20

30

40

onne

s

Argentina

China

R i

0

10

20to ArgentinaGhana

Russia

20

-10

0

U it dS thMongolia-20 United

StatesSouth Africa

Source: Source: GFMS (GFMS (Gold Survey 2010Gold Survey 2010))

g

Major Western World Mines' Cash CostsMajor Western World Mines' Cash Costs(in money(in money--ofof--thethe--day terms)day terms)

800

(in money(in money ofof thethe day terms)day terms)

600

700

AustraliaAustralia

400

500

US$

/oz

North North South AfricaSouth Africa

300

400U

Latin Latin AmericaAmerica

AmericaAmericaOtherOther

100

200AmericaAmerica

100Q1-05 Q1-06 Q1-07 Q1-08 Q1-09

Source: GFMS (Source: GFMS (Gold Survey Gold Survey 2010)2010)

YearYear--onon--Year Changes to Cash CostsYear Changes to Cash Costs540

+5+5+5+5 +3+3

500

520

US$

/oz)

+10+10

+12+12+6+6 +5+5

--44

--1212

480

500

h C

osts

(U

+21+21

460

Tota

l Cas

h

464464 478478

--3333

20092009 vsvs 20082008

440

T 2009 2009 vsvs 20082008


Mine ProductionMine Production 163 163 tonnetonne increase equal to 6.8% yincrease equal to 6.8% y--oo--y in 2009; the first y in 2009; the first

annual increase for three years.annual increase for three years. Strong growth from a suite of new projects and operating Strong growth from a suite of new projects and operating

mines. Major country gains in Indonesia, China, Russia, mines. Major country gains in Indonesia, China, Russia, Argentina, Brazil and Mexico. Argentina, Brazil and Mexico. g ,g ,

All regions posted growth, except for North America. Two All regions posted growth, except for North America. Two largest falls at the mine level were seen in the United largest falls at the mine level were seen in the United StatesStatesStates.States.

US dollar denominated total cash costs increased by an US dollar denominated total cash costs increased by an average 3%, or $14/oz, to $478/oz in 2009.average 3%, or $14/oz, to $478/oz in 2009.GFMS’ i ‘AllGFMS’ i ‘All I ’ C i d b 3 9%I ’ C i d b 3 9% GFMS’ proprietary ‘AllGFMS’ proprietary ‘All--In’ Costs measure increased by 3.9% In’ Costs measure increased by 3.9% to $717/oz.to $717/oz.

AboveAbove--Ground Stocks of Gold, endGround Stocks of Gold, end--20092009

Above-ground Stocks

Gold is not “consumed” like most commodities; stocks can be Gold is not “consumed” like most commodities; stocks can be available at the right price…available at the right price…

Above-ground Stocks, end 2009 = 166,000t

Jewellery52%52%

Official Holdings16%

Lost & Unaccounted

2%

Private Investment

Other Fabrication12%

Investment18%


Supply from Scrap, Hedging & Official Supply from Scrap, Hedging & Official SalesSales

2000 Hedging SupplyScrap

Net Official Sector Sales Flat trend since 2000?

140016001800 Scrap

Secular increase in supply 1987Secular increase in supply 1987--9999

80010001200

Tonn

es

400600800T

0200

1980 1984 1988 1992 1996 2000 2004 20081980 1984 1988 1992 1996 2000 2004 2008

Source: GFMSSource: GFMS

Change in Supply from AboveChange in Supply from Above--Ground StocksGround Stocks

400

2009 compared to 2008

200

300

0

100

tonn

es

-200

-100

-300

200

Official Sector Scrap


Regional Changes in Scrap SupplyRegional Changes in Scrap Supply2009 compared to 20082009 compared to 2008

70

80

50

60

70

30

40

50

tonn

es

10

20

30

0

10

Middle East Asia Other Indian Europe North LatinMiddle East

East Asia Other Indian SC

Europe North America

Latin America


Jewellery Fabrication & Scrap SupplyJewellery Fabrication & Scrap Supply

1500

1700

Jewellery FabricationJewellery Fabrication

1100

1300

Jewellery FabricationJewellery Fabrication

700

900

1100

Ton

nes

500

700

S S lS S l

100

300

04 H1 05 H1 06 H1 07 H1 08 H1 09 H1

Scrap SupplyScrap Supply

04.H1 05.H1 06.H1 07.H1 08.H1 09.H1

Source: Source: GFMS (GFMS (Gold Survey 2010Gold Survey 2010))

AboveAbove--Ground Jewellery Stocks by Region, Ground Jewellery Stocks by Region, dd 20092009endend--20092009

Indian Sub-Continent

16%

Europe 20%

North America17%

Other9%

East Asia25%Middle East

12%12%


CBGA and Other Gold SalesCBGA and Other Gold Sales

600

700Other CBGA

400

500

600

200

300

400

tonn

es

0

100

-100

2000 2002 2004 2006 2008

“CBGA” refers to signatories to the Central Bank Gold Agreement“Other” refers to all other countries


DemandDemand

World Gold FabricationWorld Gold Fabrication

40004500 Developing Countries

Industrialised Countries 2009 2009 down down 472t 472t

300035004000 Industrialised Countries

or or 16% 16% yoyyoy

20002500

tonn

es

50010001500

0500

1980 1984 1988 1992 1996 2000 2004 20081980 1984 1988 1992 1996 2000 2004 2008


Jewellery Fabrication: Winners and LosersJewellery Fabrication: Winners and Losers( )

0

(Figures represent year-on-year change, i.e. 2009 less 2008)

-50 EastNorth Other

Latin America

-100onne

s Indian S-CEurope

East AsiaAmerica

Other

-150

to p

-200 Middle 00East


Fabrication Demand in 2009Fabrication Demand in 2009 A sharp decline in jewellery demand was the principal driver A sharp decline in jewellery demand was the principal driver

of the 16% or 472t fall in fabrication demand to 2,417 t.of the 16% or 472t fall in fabrication demand to 2,417 t.,,

Full year jewellery fabrication dropped by 20% or 434 Full year jewellery fabrication dropped by 20% or 434 tonnes, with higher gold prices and the economic downturn tonnes, with higher gold prices and the economic downturn , g g p, g g pthe primary reasons for the fall. the primary reasons for the fall.

Other fabrication fell by just 5.4% yOther fabrication fell by just 5.4% y--oo--y to 658 tonnes iny to 658 tonnes inOther fabrication fell by just 5.4% yOther fabrication fell by just 5.4% y oo y to 658 tonnes in y to 658 tonnes in 2009. However, with all coins excluded, the drop reaches 2009. However, with all coins excluded, the drop reaches 15%.15%.

•• Electronics demand dropped by 16%, largely Electronics demand dropped by 16%, largely due to the due to the economic crisis, particularly in the first half. economic crisis, particularly in the first half.

GFMS’ Hedging AnalysisGFMS’ Hedging AnalysisGFMS Hedging AnalysisGFMS Hedging Analysis

GFMS enter all hedging transactions into our hedgingGFMS enter all hedging transactions into our hedging•• GFMS enter all hedging transactions into our hedging GFMS enter all hedging transactions into our hedging database and the database and the Brady TrinityBrady Trinity system.system.

•• Trades are input on a quarterly basis by companyTrades are input on a quarterly basis by company•• Trades are input on a quarterly basis by company, Trades are input on a quarterly basis by company, instrument, year of expiry and currency.instrument, year of expiry and currency.

•• Using detailed market data, accurate deltas and otherUsing detailed market data, accurate deltas and otherUsing detailed market data, accurate deltas and other Using detailed market data, accurate deltas and other sensitivities are calculated.sensitivities are calculated.

•• Comprehensive global hedge book analysis is published Comprehensive global hedge book analysis is published p g g y pp g g y ponce per quarter by GFMS, in association with once per quarter by GFMS, in association with Société Société Générale.Générale.

Net Market Impact of Producer HedgingNet Market Impact of Producer Hedging150

Supply

-50

50pp y

-150

-50

tonn

es

-250 Demand

-350

00.Q1

01.Q1

02.Q1

03.Q1

04.Q1

05.Q1

06.Q1

07.Q1

08.Q1

09.Q1

00 01 02 03 04 05 06 07 08 09


Total Accelerated Supply from Producer Hedging*Total Accelerated Supply from Producer Hedging*

4

r

3

end-

year Outstanding hedge book just Outstanding hedge book just

236 tonnes at end236 tonnes at end--20092009

2

) ton

nes,

1

(100

0s)

0

1995 1997 1999 2001 2003 2005 2007 20091995 1997 1999 2001 2003 2005 2007 2009* outstanding forward sales, loans and net delta hedge against positions


Investment in 2009Investment in 2009•• World Investment (which includes the implied figure, bar World Investment (which includes the implied figure, bar

hoarding and all coins) nearly doubled in 2009 to over 1,900 hoarding and all coins) nearly doubled in 2009 to over 1,900 tonnestonnes and reached an approximate value of $60 billion. and reached an approximate value of $60 billion.

•• The first few months of 2009 saw a record level of investment The first few months of 2009 saw a record level of investment demand Fears about financial stability and economicdemand Fears about financial stability and economicdemand. Fears about financial stability and economic demand. Fears about financial stability and economic depression triggered a wave of safe haven buying, particularly in depression triggered a wave of safe haven buying, particularly in the forms of gold ETFs and physical bullion products. the forms of gold ETFs and physical bullion products.

•• After a summer lull, investor activity, especially in the OTC and After a summer lull, investor activity, especially in the OTC and futures markets, picked up strongly from September onwards, futures markets, picked up strongly from September onwards, primarily driven by a weaker dollar, higher price expectations primarily driven by a weaker dollar, higher price expectations p y y , g p pp y y , g p pand growing concerns regarding future trends in inflation. This and growing concerns regarding future trends in inflation. This surge in investment demand drove prices above $1,200, before a surge in investment demand drove prices above $1,200, before a loss of momentum and some profit taking brought about a priceloss of momentum and some profit taking brought about a priceloss of momentum and some profit taking brought about a price loss of momentum and some profit taking brought about a price correction in the final weeks of 2009. correction in the final weeks of 2009.

World World Investment*Investment*

60

702000

Value of World I t t

40

501500

US

Investment

30

401000

S$ B

illionsTo

nnes

10

20500

s

0

10

0

2000 2002 2004 2006 20082000 2002 2004 2006 2008

*World Investment is the sum of Implied Net (*World Investment is the sum of Implied Net (DisDis)Investment, Bar Hoarding and all Coins & Medals. )Investment, Bar Hoarding and all Coins & Medals. SourceSource: GFMS (: GFMS (Gold Survey Gold Survey 2010)2010)

Gold Exchange Traded FundsGold Exchange Traded Funds

1800

2000Claymore Swiss Gold (SGBS)

b i

At 31/12/2009, 617t rise from 31/12/08

1400

1600

1800 ETFS NYSE Dubai DGX

Julius Baer Xetra Gold

ETF Securities Goldist

ZKB Gold iShares COMEX Gold Trust

1000

1200

00

onne

s

ZKB Gold iShares COMEX Gold Trust

SPDR Gold Trust NewGold Gold Debentures

GBS LSE GBS ASX

Central Gold Trust Central Fund of Canada

600

800

t

0

200

400

0Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10

Source: Respective issuers

Investors’ positions in gold futures in 2009 Investors’ positions in gold futures in 2009 (non(non--commercial & noncommercial & non--reportable positions in Comex & CBOT futures)reportable positions in Comex & CBOT futures)

1250

300

350

san

ds)

(( ))

Gold Price2006 2006 135k contracts135k contracts

Average size of net Average size of net “investor” “investor” long.long.

1050

250

dct

s, t

hou

s 20072007 157k contracts157k contracts

20082008 177k contracts177k contracts

20092009 219k contracts219k contracts

850

150

200

ollars/os

(con

trac

450

650

100

150

ozt

posi

tion

s

250

450

0

50Net

2500Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10

Non-commercial & non-reportable net positions in futures taken as proxy for investors’ positions.Source: CFTC

European & North AmericanEuropean & North AmericanRetail InvestmentRetail InvestmentRetail InvestmentRetail Investment

400

450

Europe

300

350Europe

North America

150

200

250

tonn

es

50

100

150

-50

0

2003 2004 2005 2006 2007 2008 20092003 2004 2005 2006 2007 2008 2009

Source: GFMS (Gold Survey 2010)

Price OutlookPrice Outlook

Gold Supply 2008Gold Supply 2008--2010F2010F

4500

5000

Mine ProductionScrapOfficial Sector

3500

4000

2500

3000

tonn

es

1500

2000

500

1000

02008 2009 2010F

Source: GFMS

Supply in 2010Supply in 2010 Mine Production forecast to increase this year but at a Mine Production forecast to increase this year but at a

slower pace just over 2% compared to the nearly 7%slower pace just over 2% compared to the nearly 7%slower pace, just over 2%, compared to the nearly 7% slower pace, just over 2%, compared to the nearly 7% yearyear--onon--year growth seen in 2009. year growth seen in 2009.

Official Sales expected to recover in 2010 mainlyOfficial Sales expected to recover in 2010 mainly Official Sales expected to recover in 2010, mainly Official Sales expected to recover in 2010, mainly driven by 191 driven by 191 tonnestonnes onon--market sales by the IMF. market sales by the IMF. Disposals from current CBGA members to be subdued Disposals from current CBGA members to be subdued while other countries to be small scale net buyers. while other countries to be small scale net buyers.

Scrap forecast to be lower yearScrap forecast to be lower year--onon--year in first half but year in first half but hi h i d h lf i h f ll l li l h dhi h i d h lf i h f ll l li l h dhigher in second half, with full year total little changed. higher in second half, with full year total little changed.

Overall supply growth in 2010 to slow to perhaps Overall supply growth in 2010 to slow to perhaps d 5% d t 2009’ id 8%d 5% d t 2009’ id 8%around 5% compared to 2009’s rapid 8% pace.around 5% compared to 2009’s rapid 8% pace.

Gold Demand 2008Gold Demand 2008--2010F 2010F 5,000

P d D H d i

4,000

4,500 Other FabricationProducer De-Hedging

3,000

3,500

nnes World Investment*

2,000

2,500Ton

1,000

1,500

-

500 • Jewellery

2008 2009 2010F*World Investment is sum of Implied Net Investment, Bar Hoarding and all Coins & Medals Source: GFMS

Demand in 2010Demand in 2010•• In spite of a reasonable first quarter, for full year 2010 In spite of a reasonable first quarter, for full year 2010

jewelleryjewellery demand will recover only modestly, due to demand will recover only modestly, due to higher prices and constrained budgets, especially in light higher prices and constrained budgets, especially in light of continued economic weakness in many countries. of continued economic weakness in many countries. Concentrated buying expected on price dipsConcentrated buying expected on price dipsConcentrated buying expected on price dips. Concentrated buying expected on price dips.

•• Other fabrication set to recover in 2010, due to growth Other fabrication set to recover in 2010, due to growth in the electronics sectorin the electronics sectorin the electronics sector.in the electronics sector.

•• Prospects for further deProspects for further de--hedging are limited by the now hedging are limited by the now very low outstanding producer hedgebook.very low outstanding producer hedgebook.very low outstanding producer hedgebook. very low outstanding producer hedgebook.

•• Investor interest in gold is expected to remain strong Investor interest in gold is expected to remain strong throughout this year and potentially well into 2011. throughout this year and potentially well into 2011. g y p yg y p y

Investment in 2010?Investment in 2010?Backdrop for investment in 2010 will remain positive as long as:Backdrop for investment in 2010 will remain positive as long as: Zero to negative real short term interest rates continue in all majorZero to negative real short term interest rates continue in all major Zero to negative real short term interest rates continue in all major Zero to negative real short term interest rates continue in all major

currencies.currencies. Concerns over sovereign debt increase and crisis spreads from Concerns over sovereign debt increase and crisis spreads from

E t U it d St tE t U it d St tEurope to United States. Europe to United States. Inflation expectations grow, especially in the US with its expected Inflation expectations grow, especially in the US with its expected

$1.6 trillion FY 2010 deficit and probable debt monetization. $1.6 trillion FY 2010 deficit and probable debt monetization.

Notwithstanding the above, risk may be growing of shortNotwithstanding the above, risk may be growing of short--term and term and temporary selltemporary sell--off by investors if fears of ‘doubleoff by investors if fears of ‘double--dip’ triggerdip’ triggertemporary selltemporary sell--off by investors if fears of doubleoff by investors if fears of double--dip trigger dip trigger liquidations across all ‘risky assets’. liquidations across all ‘risky assets’.

LongerLonger--term, gold price vulnerability is rising due to investment’s term, gold price vulnerability is rising due to investment’s ti ll hi h h f d d d th i i i fti ll hi h h f d d d th i i i fexceptionally high share of demand and the increasing size of exceptionally high share of demand and the increasing size of

investors’ nearinvestors’ near--market bullion stocks. market bullion stocks.

World InvestmentWorld Investment* & * & Fabrication Fabrication (excluding all coins)(excluding all coins)((19801980 2010F)2010F)((19801980--2010F)2010F)

3500

4000

FabricationFabrication

2500

3000

3500 FabricationFabrication

1500

2000

2500

Ton

nes

1000

1500World InvestmentWorld Investment

0

500

1980 1984 1988 1992 1996 2000 2004 20081980 1984 1988 1992 1996 2000 2004 2008

*World Investment *World Investment is the is the the sum of implied investment, bar hoarding and all the sum of implied investment, bar hoarding and all coins & medalscoins & medalsSource: Source: GFMSGFMS

Price OutlookPrice Outlook• Investors will remain the principal driver of prices this year, with a breach of $1,300 in the second half still a possibility, although probability has fallen.

• In the short term prices could retrace from current levels; the mid• In the short term, prices could retrace from current levels; the mid $1,000s are a possible low over the next three months, with prices in that region most likely to be eventually pushed up again by bargain hunting and stock replenishment.

• Supply expected to rise fairly strongly in 2010, with growth in mine production, and, from a very low base, official sector sales, the latter also expected to be concentrated in the second half. Scrap supply has fallen year to date but should recover in the latter part of 2010 basis higher priceyear-to-date but should recover in the latter part of 2010 basis higher price conditions. These will also mean that there is only a moderate recovery in fabrication demand for the calendar year as a whole.

• Imbalances in the market suggest that at some point the gold price will• Imbalances in the market suggest that at some point the gold price will have to retreat. Nevertheless, this is most unlikely to occur on a secular basis in 2010 and potentially not until well into 2011 given current economic conditions, which in an underlying sense still favour gold investment.

GFMS Gold Price Forecast for 2010GFMS Gold Price Forecast for 2010

1300

1400

1100

1200

rage

s)

900

1000

wee

kly

ave

700

800

900

US$

/oz

(w

Forecast Average: $1 170

500

600

700 Forecast Average: $1,170Forecast Range: $1,050-$1,300

500

Jan-07 Jan-08 Jan-09 Jan-10Source: Source: GFMS GFMS

GFMS Forthcoming EventsGFMS Forthcoming EventsGFMS Forthcoming EventsGFMS Forthcoming Events

•• 22 April 2010: 22 April 2010: Platinum & Palladium Survey 2010Platinum & Palladium Survey 2010

•• 27 May 2010: 27 May 2010: World Silver Survey 2010World Silver Survey 2010

•• September 2010: September 2010: Gold Survey 2010 Gold Survey 2010 –– Update 1Update 1

DisclaimerDisclaimerDisclaimerDisclaimerThe information and opinions contained in this presentation have The information and opinions contained in this presentation have been obtained from sources believed to be reliable, but no representation or warranty, express or implied, is made that such information is accurate or complete and it should not be relied information is accurate or complete and it should not be relied upon as such. This presentation does not purport to make any recommendation or provide investment advice to the effect that any gold related transaction is appropriate for all investment y g pp pobjectives, financial situations or particular needs. Prior to making any investment decisions investors should seek advice from their advisers on whether any part of this presentation is appropriate to their specific circumstances. This presentation is not, and should not be construed as, an offer or solicitation to buy or sell gold or any gold related products. Expressions of opinion are those of GFMS Ltd only and are subject to change without notice Ltd only and are subject to change without notice.

Documents

Gold Survey 2010 Presentation DGG Zurich · 163 163 tonnetonne increase equal to 6.8% yincrease equal to 6.8% y--oo--y in 2009; the first y in 2009; the first annual increase for