After a temporary decline in quotations, the price of gold on the world market began to show signs of recovery. However, according to some experts, a new threat is looming over the precious metal - the discovery of the largest gold deposit in China, the reserves of which are estimated at $83 billion. There is an opinion that its development may put significant pressure on the cost of the precious metal in the future by changing the balance of production and trade in the global gold market.

Since September 2023, the price of gold has risen consistently (not counting small fluctuations around $5-$10). Only since the beginning of 2024 the price of the precious metal has increased by 32.3% to $2 thousand 669.6. KGS, however, this is taking into account a significant drop in the price recorded on 31 October. The decline in the price of gold continued until 15 November.

After the first mentioning of the new deposit, a number of experts had a question how this fact will affect further pricing of gold. ‘Akchabar’ previously wrote that this event could already become a reason for China to leave the list of buyers of the precious metal of Kyrgyz production. In 2023, China purchased $115.4 million worth of gold from Kyrgyzstan, becoming its main buyer. In 2024, in the first half of the year, the volume of supplies increased to $129.4 million.

According to experts in the mining industry, the development of any deposit, especially at depths of 2-3 thousand meters, is a complex process. The construction of infrastructure, including gold extraction plants (GEP), requires considerable time and resources. Nevertheless, rising global gold prices make the development of even deep deposits economically viable.

‘When we started developing Kumtor, an ounce of gold cost about $300. Now the price has reached $2.6 thousand, and forecasts show a possible increase to $3 thousand in 2025,’ - Duishenbek Kamchybekov, Chairman of the Board of the Association of Mining and Geology of Kyrgyzstan, Doctor of Technical Sciences, said in a conversation with ‘Akchabar’.

Gold mining in China is unable to meet domestic demand, forcing the country to actively import the metal, the expert said. Over saturation of the world market with gold should not be expected either. High demand remains due to the sustained interest in the precious metal as a strategic asset, its role in the formation of national reserves, as well as its wide application in key industries. Gold is indispensable in electronics, medicine and aerospace due to its unique physical and chemical properties.

According to the International Gold Council, in the second quarter alone, countries bought 65.35 tons of gold to add to their foreign reserves. Poland and India were the leaders in buying the precious metal, with Turkey rounding out the top three.
Kyrgyzstan is also actively increasing its gold and foreign exchange reserves. At the end of October, according to the NBKR, it amounted to $4.9 billion. Compared to a month earlier, they increased by 14.71%, or $633.05 million. The growth was mainly due to the increase in the volume of gold in reserves.

As a gold mining country, Kyrgyzstan gives priority right to purchase gold to the National Bank and the Cabinet of Ministers. The regulator purchases Kyrgyz gold to replenish reserves.

In addition, gold remains the country’s main export commodity. In the first eight months of 2024, the Republic exported 8.7 tons of gold worth $639.4 million. The largest buyer of the precious metal has traditionally been Great Britain.

It should be added that at the global level, the United States remains the leader in gold reserves with 8,133.5 tons, followed by Germany (3,351.5 tons) and the IMF (2,814 tons). Russia and China are in sixth and seventh place with 2,335.9 and 2,264.3 tons respectively.