Earth’s gold production could run out in two decades
One of the factors contributing to gold being a precious metal is its rarity. Manufacturers need to process many tons of ore to get just a few ounces of the precious metal. This rarity could increase if the forecasts of some analysts come true. They indicate that the Earth’s extractable gold reserves will dissipate within 20 years.
The debates on whether gold mining production has reached its maximum remain unchanged. Thanks to the continuous rise in the price of the precious metal, gold production has been growing in recent decades.
The high value of the metal has allowed the exploitation of deposits that would not be profitable at a lower price.
The problem is that, like other natural resources, the amount of gold that still exists on the Earth is meager, and no one knows for how long the reserves can last.
According to a recent Goldman Sachs report, the rarest commodities may start to become scarce in a matter of decades. Analysts at the US investment bank estimate that the Earth has 20-years of gold, diamond, and zinc mineable reserves. The existing reserves of platinum, copper, and nickel could last another 40 years or even less.
According to Eugene King, a mining and metals analyst at Goldman Sachs, the combination of the deficient concentration of elements in the Earth’s crust and a lack of premium deposits means that some metals are going to be in short supply. Gold has been in use as a symbol of wealth for over 4,000 years. The Egyptians had already realized that gold was not only shiny and heavy but also very scarce, King stated.
A limited supply of gold will push prices higher in the coming years
This relative scarcity and the belief in the market that discoveries will be limited will skyrocket the price of these commodities in the coming years.
The total figure of gold extracted from mines has been growing in the last decade. In 2010, 2,793 tons of gold was extracted, compared to 3,509 tons in 2018, before falling slightly in 2019 to 3,464. In other words, 2018 would have been the year that has recorded the highest gold production in history.
The question is whether production will recover in the coming years, returning to record a new historical figure. Everything indicates that the 2020 production volume will be very similar to that of last year. The temporary closure of many operations due to coronavirus restrictions compromised the possible increase in production.
According to analysts, in the coming years, gold will reach its maximum. It will be an essential factor in the face of the rise in the price of the metal.
- Trading Instrument
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. Subscribe now and receive FREE updates on the market today!