{"id":10801,"date":"2024-06-12T06:04:25","date_gmt":"2024-06-12T06:04:25","guid":{"rendered":"https:\/\/economicherald.net\/?p=10801"},"modified":"2024-06-12T06:04:25","modified_gmt":"2024-06-12T06:04:25","slug":"we-might-be-about-to-hit-peak-gold-for-real-this-time","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=10801","title":{"rendered":"We might be about to hit \u2018peak gold\u2019. For real, this time"},"content":{"rendered":"

Gold production from mining is rising at an unsustainable rate, according to the World Gold Council
\nThere\u2019s only about 15% of known gold reserves left, says the USGS
\nRecycling is ramping up, but that will only get us so far<\/p>\n

\u00a0<\/p>\n

Hold onto your hats, gold lovers\u00a0\u2013\u00a0things could be about to get a little bumpy, after some moderately concerning rumblings from industry experts that are pointing towards a rapidly-approaching deadline called \u201cpeak gold\u201d.<\/p>\n

Peak gold (or peak \u2018anything\u2019, for that matter) is the point at which production (or in this case, from mining) of a commodity stops growing, because we\u2019re starting to run out of a finite resource for humans to extract and turn into other, hopefully better things.<\/p>\n

And it\u2019s well-known that gold is most definitely a finite resource, with only an estimated 244,000 metric tons lying in the \u201cdiscovered\u201d column, of which 187,000 metric tons have already been mined, with most of that coming from China, Australia, and South Africa.<\/p>\n

That\u2019s according to the United States Geological Geological Survey, which also offered up this wonderful visualisation: all of the world\u2019s mined gold, if you smelted it down and turned it into a solid block, would make a cube 23 metres long on each side.<\/p>\n

That, in layman\u2019s terms, is only about 5.5 Volkswagen Beetles (an accepted non-industry standard measurement) per side, and\u00a0\u2013\u00a0in the grand scheme of things \u2013 is not very large.<\/p>\n

Before you fire up the calculator, at today\u2019s prices (US$2,312\/oz) it\u2019s worth a cool US$15,263,225,994,000 \u2013 or thereabouts.<\/p>\n

That cube represents close to 77% of the known gold on the planet \u2013 and the remaining 23% isn\u2019t exactly lying around on the surface, waiting to be picked up.<\/p>\n

Finding and mining gold is getting harder \u2013 and at the rate we\u2019re going, there\u2019s close to zero chance that the industry will be able to continue to ramp up production to meet demand.<\/p>\n

\u00a0<\/p>\n

Diminishing returns<\/h2>\n

There\u2019s one side to this theory that suggests that we might have already passed the \u201cpeak gold\u201d moment, back in 2018 when things started looking a little tight.<\/p>\n

More recently, however, are reports that the global industry is struggling to maintain production growth to meet the constant demand, with John Reade, chief market strategist for the World Gold Council, sounding the alarm in a recent chat with CNBC.<\/p>\n

\u201cWe\u2019ve seen record first quarter mine production in 2024 up 4% year on year. But the bigger picture, I think about mine production is that, effectively, it plateaued around 2016, 2018 and we\u2019ve seen no growth since then,\u201d Reade said.<\/p>\n

In 2020, production retreated for the first time in a decade, falling by about 1.0%.<\/p>\n

By 2021, gold mining fell short of actual requirements by just over 460 metric tons, and the industry turned to recycling to make up the shortfall.<\/p>\n

In 2022, mine production was up 1.35% year on year, but in 2023 we saw a relative slow-down, with production rising by just 1% to 3,644 tonnes.<\/p>\n

Notably, Australian output for that period actually fell 2.0% year on year, a fall of around 7 tonnes of mined gold.<\/p>\n

\u201cI think the overwhelming story there is: after 10 years of rapid growth from around 2008, the mining industry is struggling to report sustained growth in production,\u201d said Reade.<\/p>\n

\u201cIt\u2019s getting harder to find gold, permit it, finance it, and operate it,\u201d he concluded.<\/p>\n

\u00a0<\/p>\n

Keep digging\u2026<\/h2>\n

It\u2019s not all bad news, though \u2013\u00a0as previously reported on Stockhead, Metals Focus, a renowned London-based precious metals research consultancy group, has released its Gold Focus 2024.<\/p>\n

And the tone of that report is, unsurprisingly, fairly upbeat, suggesting that gold is expected to achieve fresh all-time highs in H2, 2024, as the economic and geopolitical backdrop remains supportive.<\/p>\n

On top of that, the ASX-listed goldies have been having a pretty solid time of things so far in 2024, with a number of decent finds and some solid backing from investors who are either super-serious about gold, or see it as a perpetual safe haven during times of broader market volatility.<\/p>\n

Combined, the ASX-listed gold diggers have put on about +0.42% so far this year, but things have been a tad tumultuous, with the XGD All Ords Gold Index falling very sharply in the past week, down -3.52% at the time of writing.<\/p>\n

But, as they say in the classics, \u201cwhen in doubt \u2013 zoom out\u201d \u2013\u00a0and a wider look at that sector\u2019s performance shows that the goldies are up significantly since this time last year, by 8.12%.<\/p>\n

So while the alarm bells might be ringing for global supply, there\u2019s still money moving in the right direction for investors.<\/p>\n

Which means \u2013 maybe<\/em> \u2013 that hitting peak gold wouldn\u2019t be such a bad thing after all\u2026<\/p>\n

\u00a0<\/p>\n

Read more: <\/strong>Gold Digger: <\/span>These small ASX goldies nailed it in May<\/span><\/a><\/strong><\/p>\n

\u00a0<\/strong><\/p>\n

<\/span><\/p>\n

The post We might be about to hit \u2018peak gold\u2019. For real, this time<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Gold production from mining is rising at an unsustainable rate, according to the World Gold Council There\u2019s only about 15% of known gold reserves left, [more…]<\/a><\/p>\n","protected":false},"author":0,"featured_media":10802,"comment_status":"","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-10801","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"\nWe might be about to hit \u2018peak gold\u2019. For real, this time - Economic Herald<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/economicherald.net\/?p=10801\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"We might be about to hit \u2018peak gold\u2019. 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