We’re a Long, Long Way From Running Out of Gold – by David Fickling (Bloomberg News – October 1, 2020)


(Bloomberg Opinion) — Here’s one potential reason to add some bullion coins or bars to your investment portfolio: They’re not making any more of them.

All the gold that’s ever been mined would fit into a cube with edges 22 meters long — small enough to fit into three Olympic-sized swimming pools. Each year, miners and pawnbrokers add another 4,000 to 5,000 metric tons to an existing 197,576 ton pile, but jewelry demand alone uses up about half of that.

With the metal hitting a record $2,075 a troy ounce in August, the concern we’re heading toward peak gold has reared its head again. The industry needs to commission 8 million ounces of projects by 2025 to maintain last year’s production levels, consultants Wood Mackenzie wrote in June, requiring some $37 billion of capital investment.

Mine production fell last year for the first time in more than a decade. Even the British Broadcasting Corp. has been asking whether we’re at risk of running out.

At the core of the concern is a longstanding trend in the gold mining industry: The percentage of gold in ore reserves is falling, from more than 10 grams per ton in the late 1960s to barely more than 1 gram per ton nowadays.

For the rest of this column: https://www.bnnbloomberg.ca/we-re-a-long-long-way-from-running-out-of-gold-1.1501998

Comments are closed.