Where All the Gold of the World Is
An interesting data set shows where all the gold in the world actually sits today. Around 2,16,000 tons of gold has already been mined and is above the ground.
This gold is with people, investors, and central banks. The total value of this gold runs into trillions of dollars. Below the ground, there is still gold left, but that amount is much smaller compared to what is already above the ground.
Gold Still Hidden Below the Earth
Below the ground, there are about 1,32,000 tons of gold in total. But not all of this can be mined easily. Only around 54,000 tons are known reserves that can be mined at current gold prices. Another 77,000 tons are known resources, but mining them is not useful right now because the cost is too high. If gold prices rise a lot in the future, these resources may also become useful.
Why Mining Gold Is Getting Harder
Gold mining is becoming more costly every year. Miners now go two to three kilometers deep into the earth to find gold. As depth increases, costs also rise. If gold prices fall, many mines will shut down because mining will not make sense. This can quickly create a shortage in supply, which again supports gold prices.
Global Demand Is Very Strong
Every year, the world produces around 3,500 tons of gold. Out of this, China buys close to 900 tons and India buys around 800 to 900 tons. Central banks were earlier buying around 400 tons a year, but for the last three years, they have been buying nearly 1,000 tons every year. Demand is very strong, while supply cannot increase suddenly.
Most Gold Will Never Come Back to the Market
Out of the 2,16,000 tons of gold above the ground, nearly 1,00,000 tons is in jewelry form. This gold is mostly not for sale. Around 50,000 tons is held as bars and coins by investors, which is the main gold that moves in and out of the market. Central banks hold about 37,000 tons and are unlikely to sell. Around 32,000 tons is used in industry and mostly gets recycled.
Why Gold Stays in Balance Over Time
In reality, only about 50,000 tons of gold is freely available for trading. New mining adds just one to two percent to total supply every year. This means a sudden flood of gold supply is not possible. If prices fall, mining stops and shortages appear. This creates a natural balance in gold prices. Over the long term, gold has given steady returns, and yearly growth of 12 to 14 percent is considered very good.
