Is Apple Really Buying a Third of the World's Gold for its New Watch Edition?

By We Photo Booth You

We’re going to go out on a (rather short) limb and guess that Apple will probably not use a third of the world’s gold in the production of its expected $5,000 18-karat Watch Edition.  But what would it take for the company to need to use up one of the world’s most precious metals like this?

The beginning of this year saw the Wall Street Journal reporting—from a person familiar with Apple’s plans—that the U.S. tech giant expects to sell 1 million of their Watch Editions every month. To do so, the curious and math-inclined side of the Internet has tried to calculate how much gold the company would need to meet their projected demand.

Many speculators believe that 2 troy ounces of the commodity will be used per smartwatch. In this case, Apple would have to buy an incredible 750 tonnes of gold a year to keep up with production. This is a game-changer, as the amount of gold mined globally each year is around 2,500 tonnes, making Apple the consumer of one third of the world’s gold.

Is this accurate? Probably not. Some believe the actual amount being used in the Apple Watch Edition’s production is somewhere around a half a troy ounce per product, dropping demand to just over 180 tonnes.

Read related article from Business Review Australia:
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Something else to consider: can Apple really move 1 million Watch Editions a year? Although I wouldn’t bet against the company—which is not only the biggest and richest company in the world but has come off of great sales figures in the last quarter—1 million could be a little steep. Some analysts believe that 50,000 units a month is more realistic, dropping the demand of gold to less than 10 tonnes a year.

This is still unprecedented, but anyone with knowledge of Apple’s history shouldn’t be surprised by that. Regardless of the Watch Edition’s 50,000 or 1 million sales a month, if the company sells anything near these goals the price of gold is sure to increase.

Information sourced from Business Insider.

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