U.S. Overtakes Soviet Union in Gold Output

The United States produced a record amount of gold last year, displacing the Soviet Union as the No. 2 producer in the world, the research company Gold Fields Mineral Services said Tuesday.

South Africa remained the biggest producer in the world.

The company also said in its annual review that world gold production rose to a record high in 1990, but demand for the metal exceeded supply for the third straight year.

Overall gold output rose 3% to 1,734 metric tons--the smallest annual increase since 1981--but demand was 4% higher at 2,380 tons.

The higher demand did nothing for prices, however, as nations needing cash unloaded some of their stockpiles.

“Producer forward selling, Middle East disposals and sales from the Communist Bloc resulted in the average price rising only marginally to $384 an ounce,” it said. The 1989 average was $381.

The price has been under pressure so far this year, closing Tuesday at $357.20 an ounce on the New York Commodity Exchange.

U.S. mine production jumped 11% to a record 295 tons, overtaking the Soviet Union as the world’s second-largest producer.

But the 30-ton rise was below the annual 50-ton increases of the previous two years, supporting the belief that American gold output will peak in the near future.

Gold Fields, jointly owned by three mining groups, said demand for gold increased in the first half of 1990 because of buoyant market conditions and rising world prosperity.

Communist Bloc countries sold 380 tons in 1990, up from 296 tons in 1989. Sales by the Soviet Union increased marginally to 285 tons, as outdated machinery and a lack of spare parts hurt production.

Gold Fields said the Soviet Union was likely to sell more gold, which is a prime source of foreign exchange, in 1991 because of the economic crisis in the country.

“However, although the actual level of Soviet sales to the West may remain high, the quantity sold is unlikely to increase dramatically,” it said.

Forward gold sales by producers, to lock in guaranteed prices, rose sharply to 240 tons from 65 tons in 1989.

Sales of gold scrap jumped to 441 tons from 324, which was the highest since 1986 and reflected precautionary selling by Middle East nations.

South African production was estimated at 605 tons last year, down fractionally from 607 tons in 1989.

Australia’s 1990 output jumped 19% from the year before to 241 tons.

“Australia’s production is believed to have peaked last year, with future output expected to fall due to the imposition of tax, increasing environmental pressures and the lower real gold price of recent years,” it said.

Production in Brazil slumped by 22% to 78 tons.