Atlanta Gold & Coin found useful material about gold’s limited supply and the way it is produced, along with information on leading gold-producing nations and major gold holders. The following points were drawn from an infographic prepared by Gold Corp, supplemented by Atlanta Gold & Coin’s research into gold’s availability and scarcity at the time this article was published.
Scarcity
Few people would dispute that gold is scarce or that extracting it from the ground is costly. At the time of publication, the expense of mining and producing one ounce of gold was close to the then-current spot price of $1,300 an ounce. Its scarcity becomes easier to understand when considering the estimate of just one gram of gold for every 250 tons, or 550,000 lbs., of earth. A remarkable volume of earth must be uncovered to yield the equivalent of $42 worth of gold. The article also noted that ore quality had declined in recent years. If that pattern continued, still more earth would need to be moved in the future to produce an equal amount of gold.
Availability
At the time this article was published, an estimated 166,000 tons of gold was available above ground, while about 116,000 tons remained underground. More notably, only 56,000 tons of that underground gold—less than 50%—was expected ever to be recovered and added to the supply stream. The original article suggested this could eventually lead to peak gold, similar to the concept of peak oil. Because ore grades were deteriorating, mining was becoming more expensive, and 33% more gold was expected to be mined and brought into production, the article projected that gold prices would likely rise, at least from supply-and-demand considerations.
Top Producing Countries
Countries around the world accounted for roughly 2,900 tons of gold production in 2013. The original discussion focused on the six leading producers, listed in order as China, Australia, Russia, the United States, Peru, and South Africa. Most of those nations produced gold coins, bars, and jewelry for export to other countries. At publication, China had enacted a law barring gold exports, so the article anticipated that Chinese gold holdings would grow substantially in the following years, particularly because China produced more than 437 tons of gold in 2013.
Top Official Holdings
At the time of publication, this figure could be misleading because it counted only gold that nations had reported as official holdings. Through 2013, the leading official holders of gold bullion, in order, were the United States, Germany, Italy, France, and China. The Gold Corp infographic available on visualcapitalist.com reported China’s official holdings at slightly more than 1,000 tons. However, the article noted a widespread belief that China might actually hold closer to 2,710 tons of gold holdings, which would have placed it second worldwide in gold reserves. Given the pace at which China had been accumulating gold at that time, the article suggested it might exceed United States holdings by 2030.
Summary
In short, gold often has more behind it than first appears. Putting the figures in context helps illustrate why it was considered a scarce resource: at a rate of one gram for every 250 tons of earth, locating gold requires working through a very large amount of material. What may have surprised readers most was that most of the gold available worldwide at publication had already been mined. The original article estimated that the underground gold likely to be recovered and added to production was only 33% more than the then-available above-ground supply. At the time of publication, China was identified as the world’s leading gold-producing country. Because China did not then permit gold exports, the article expected its official holdings to increase much faster than those of the other leading official gold-bullion holders.
