Limits on Gold Supply The World is Running out of Gold

Limits on Gold Supply The World is Running out of Gold

The world is running out of gold. It is projected to be in short supply a few decades from now. This is because in contrast to commodities that can be created like currency, real estate, bonds, etc, no one can create gold. The availability of gold depends on supplies availed by nature. If we don’t discover new gold sites to mine the commodity, then we would be gradually running out of mining sites, as a result of depletion.

The table below shows that the earth supply of gold is dwindling, as a result of continuous miming, without the corresponding discovery of new deposits.

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IsΒ the World Running out of Gold?

Several centuries ago, economists were bamboozled by a trend concerning prices, to wit: what makes prices of certain nonessential commodities to be higher than that of some essential commodities.

For example, why water, an essential and indispensable good is so inexpensive compared to diamonds or gold which are nonessential and do not sustain life

It is instructive how simple the answer was, yet potent. Unlike water, which is readily and abundantly available, all economic commodities are scarce and not readily available. The scarcer an item is the higher its value. The amount of water in the world cannot be compared to that of gold. It is far easier to find and fetch water from a stream or river than it is to discover and mine gold.

Gold and water are valuable for lots of reasons, but the rarity of gold makes it an expensive commodity that may be just about to run out in few decades.

Running out of Gold in Just 20 Years

A report which referenced why we just might be running out of gold was posted in the Wall Street Journal in respect of a write up which talked about the pulling through of the β€œthe Barrick-Newmont” mining merger, written by Alistair MacDonald.

The report began by stating:

”The big dilemma for gold miners: There aren’t much gold left.”

The shortage of mineable gold is causing nightmares to several mining corporations around the world. My only reservation with Mr. MacDonald’s supposition is that it lacks emphasis on the fact that we may be running out of the world’s most precious metal: gold.

At contemporary mining intensity, we are just about twenty years away from absolutely draining all of the known gold mines on earth.

However, this does not imply that we cannot find more gold. My concern is that it is very uncommon to discover new gold mines to extract this yellow precious metal. This has become even more apparent with the explosion in the universal demand for gold over the past 25 years.

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