Gold-producing countries boosted output in 2011 but with gold prices pushed higher by macroeconomic concerns, share prices of gold producers continue to underperform the yellow metal itself. According to the US Geological Survey, the world's gold-producing countries bolstered their output in 2011, producing a total of 2,700 tons of gold, a 5.5 percent increase on 2010. China's gold output reached a record high of 360.96 tons in 2011, according to the China Gold Association, cementing its top global ranking for the fifth consecutive year. Statistics from China's Ministry of Industry and Information Technology also show that the country's gold mining sector continued to expand in January with a rise of about 3.69% from the same month a year ago. China's increasing gold output remains nowhere near the country's huge appetite for consuming gold, however, which rose to roughly 800 tons in 2011. Indeed, China and India top the list of sources of demand. The World Gold Council said that in the last quarter of 2011, China consumed 190.9 tonnes of gold, compared with India's 173.0 tonnes, ranking China top in terms of consumption, something the industry body had not expected. Central banks also added 439.7 tons to reserves last year, the World Gold Council said. Gold prices, meanwhile, have been relatively muted in March due to strengthening investor optimism along with a sharp rise in treasury yields. A recent fall in gold prices has led one or more central banks to buy as much as four tonnes of bullion in recent weeks, according to a recent press report. As at 10.24am EDT, gold futures on the NYMEX were down 1.07 percent to $1,649.50. Gold reached as high as $1,925 an ounce on September 6 amid worries that the European debt crisis would slow global growth and on demand for the yellow metal as a hedge against inflation. Gold has declined 3 percent this month, after the Federal Reserve increased its forecast for the US economy and held off on new actions to stimulate growth. While gold prices are finally falling off recent highs, gold mining stocks continue to lag. Gold shares on Toronto's S&P/TSX Composite are down 28 percent as of mid-March from historic highs in September, while the equity market benchmark is down only 1.5 percent. Indeed, it would seem that precious metals investors may be shifting their assets out of actual gold producers and into exchange-traded bullion funds. Holdings of the metal through ETFs have more than tripled in the last five years and reached a record 2,410.2 metric tons in early March, valued at about $131.3 billion, according to market data. The purchase of bullion and ETFs which closely track bullion prices such as the $69 billion SPDR Gold Trust, the world's biggest gold ETF, have become increasingly popular as miners struggle to develop assets in remote geographical locations and pay higher costs.

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