Australia remains the country with the greatest gold reserves in the world by a significant margin in 2021. With no end in sight for the mining boom, and gold prices expected to rise again before 2022, Australia is tipped to become the world's leading gold producer this year, making investing in gold and gold mining companies a safe investment option.

10,000 metric tonnes

Australia's gold reserves were estimated to total at over 10,000 metric tonnes in December 2020 by the US Geological Survey. Runners up were Russia with 7,500 tonnes and the United States far behind with 3,000 tonnes.

These estimates are subject to correction as further reserves are discovered and mining activity continues, but Australia's strong lead is likely to remain, particularly as it holds more gold than all countries outside of the top 15 combined.

The Reserve Bank of Australia (RBA) declares holdings of 80 tonnes of official reserve assets, including gold currently on loan.

Second largest gold producer

Australia remained the world's second-largest producer in 2020, producing 320 tonnes or 10% of all gold mined worldwide. China remained ahead with 380 tonnes or 11.9%, while Russia took third place with 300 tonnes or 9.4%. Together, the three countries accounted for almost one third (31%) of the 3,200 tonnes of gold produced worldwide last year.

China consolidated its lead through the nation's stringent handling of the coronavirus pandemic that enabled mining to continue with minimal interruptions compared to other nations. Production was also motivated by the high domestic and international demand for gold and heavy investment in the industry.

Australia is still predicted to overtake China as the world's leading gold producer in 2021 as restrictions on the industry continue to ease, allowing production to accelerate and exploration to resume.

Gold price rise forecast to continue

Gold prices hit an all-time high last year, rising above US$2,000 per ounce in August 2020 and seeing the best year-over-year growth since 2010. Investment in gold was driven by investors favouring a stable asset as a safe haven to protect their wealth in the economic downturn caused by COVID-19, and this investment, in turn, fuelled more mining activity and exploration.

Although gold prices dropped and consolidated subsequently, many analysts are optimistic that the value of gold will rise again in 2021 and into 2022, especially if inflation continues. Citigroup is even forecasting a new high of $2,500 before the year's end, which is good news for investors.

Resources & Energy Group (ASX: REZ)

Barclay Pearce Capital client Resources & Energy Group (ASX: REZ) is a gold explorer, developer and producer, with projects in Western Australia and Queensland. ​REZ is focused on developing highly prospective and low-risk Australian mining regions.

Resources & Energy was formed in 2005, and has operated as a gold exploration and development company since 2015.

To keep up to date with their news and progress, and for more information about gold investment as a whole, subscribe to the Resources & Energy Group Chairman's List.