Fundamental Stats -

On December 22, 2008, the International Copper Study Group (ICSG) said that its preliminary data showed that world copper production outpaced consumption by 120,000 tons in the first nine months of 2008, down from a 72,000 ton surplus a year ago. World mine production was down nearly 1% in the first nine months of 2008 from a year ago while refined usage was up nearly 3%. In all of 2007, world mine production was up 3% and exceeded consumption by 294,000 tons.

On October 8, 2008, the ICSG predicted that 2008 will show a world production surplus of 109,000 tons followed by a 277,000 ton surplus in 2009. World mine production is expected to increase 2% in 2008 and a whopping 11% in 2009. London inventories of copper started 2007 at 182,800 tons and ended the year at 197,450 tons.

World Copper Mine Production (million metric tons):
1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009
12.2	12.7	13.2	13.6	13.6	13.8	14.6	14.9	15.0	15.4e	15.7e	17.4e

Fundamental Stats -

In six short years, the tables have turned dramatically for gold. In 2001, the production costs of gold were roughly $160 per ounce as prices dipped to $270. Then in early-2008, production costs rose to $400 to $500 an ounce as prices briefly hit $1,000. Just as the outlook for gold was too gloomy in 2001, it probably got too rosy early in 2008. Much of the credit for gold's rise can go to the consolidation that has taken place in the mining industry. This activity led to more disciplined production decisions while the U.S. economy and dollar stumbled.

The heaviest burden on gold prices typically comes from central bank sales. In September of 2004, a new five-year agreement limited sales to 500 tons per year. However, bank sales did not reach their limit in 2008 and some are guessing that banks are no longer eager to sell their gold. On April 8, 2008, the International Monetary Fund let it be known that it may sell 13 million ounces of gold over several years to raise cash.

On September 17, 2008, GFMS Ltd. said that world mine production will be down 2.3% in 2008 to 2,422 tons, the lowest since 1996. On November 20, 2008, the World Gold Council said that world gold demand was up 18% in the third quarter from a year ago. On November 21, 2008, an analyst was quoted by Bloomberg news as saying that world gold production will be down 3% in 2008 and down 5% in 2009. Reduced world production at a time when the U.S. will likely be diluting its currency to pay for financial bailouts makes gold look attractive. Also, late in 2008, there has been talk that the financial panic has led to a shrinking supply of gold coins available.

World Gold Mine Production (million troy ounces):
1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008
77.5	79.1	81.7	83.1	84.3	83.3	83.4	79.4	81.9	79.9e	79.6e	77.9e

Fundamental Stats -

Until prices exploded higher in late-2003, it was hard to find anything positive to say about silver. The main changes have been the consolidation that has taken place in the gold and copper industries and the difficulty in developing new sources of production. As much as 75% of silver's production comes from gold, copper, lead, and zinc mining which is why changes in these other industries have a large impact on the price of silver. On the demand side, silver (like most commodities) benefits from strong world growth and a weaker U.S. dollar.

Fundamental data is hard to come by for the silver market, but the Silver Institute said that world mine production totalled 671 million ounces in 2007, up almost 4% from the previous year. 2007 fabrication demand totalled 844 million ounces, up 1% from the previous year.

World Silver Mine Production (million ounces):
1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008
542	557	591	606	594	601	621	644e	647e	671e