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The supply and demand as well as speculation controls the price of gold in USA. Unlike most other commodities, saving gold and disposal plays a larger role in affecting its price than its consumption. Most of the gold ever mined still exists in accessible form, such as bullion and mass-produced jewelry, with little value over its fine weight and is thus potentially able to come back onto the gold market for the right price. At the end of 2006, it was estimated that all the gold ever mined totaled 158,000 tons. All this gold would be a cube with an edge length of 66 feet. At the end of 2004 central banks and official organizations held 19 percent of all aboveground gold as official gold reserves. Given the huge quantity of gold stored aboveground compared to the annual production, the price of gold is mainly affected by changes in sentiment, rather than changes in annual production. According to the World Gold Council, annual mine production of gold over the last few years has been close to 2,500 tons. About 2,000 tons goes into jewelry or industrial/dental production, and around 500 tons goes to retail investors and exchange traded gold funds. This translates to an annual demand for gold to be 1,000 tons in excess over mine production, which has come from central bank sales and other disposal. When dollars were convertible into gold, both regarded as money. However, most people preferred to carry around paper banknotes rather than the somewhat heavier and less divisible gold coins. If people feared their bank would fail, a bank run might have been the result. If the return on bonds, equities and real estate is not adequately compensating for risk and inflation then the demand for gold and other alternative investments such as commodities increases.

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