One of the most attractive points from an investment point of view is that gold is scarce and finite, and that, as an element, it cannot be created. What we have on Earth is what there is.
But how much is that amount exactly? And how do we define “how much gold is there?”?
There is no known precise figure of how much gold exists. Rather, there are several different sources that offer some estimates. After all, gold has been used by humans for almost 6,000 years. And obviously, nobody has produced a detailed account of where and when it was mined and used over such an enormous period of time.
Mined Gold vs Reserves vs Resources
Additionally, such reports make the distinction between what has already been mined versus what remains in the ground. A further distinction within unmined gold exists by separating what is economically viable at the current gold price (reserves) versus what is viable at a higher price or additional research or investigation (resources). New developments in technology could one day help find new reserves or mine gold in deeper mines that are not currently viable. For example, deposits exist in Antarctica and the ocean floor, but these are not considered viable.
The World Gold Council, an organisation of gold mining companies, estimate 197,576 tonnes of gold has ever been mined, and that 50,000 tonnes remain in reserves underground. The US Geological Survey says 187,000 tonnes have been mined with reserves estimated at 57,000 tonnes.
The first estimate of the amount of gold can be imagined as a cube as shown by the World Gold Council:
Production and Limited Supply
In the last few years, gold production has grown slightly slower than previously but remains above 3,000 tonnes per year. Some analysts believe we have reached “peak gold” and that this actually occurred in 2018 though this is disputed. For example, S&P Global Intelligence argues that 2019 was actually a record year of production. One thing is clear. If 3,000 tonnes are mined annually, and there are only between 50,000-60,000 tonnes in reserves then it won’t be long until these existing reserves run dry.
What Is the Value of All Above Ground Gold?
If we take the World Gold Council estimate of 197,576 tonnes, multiply by 32151 to get troy ounces, then multiply by the current price of gold at USD1,870 we reach a gross value of USD11.9 Trillion of all the estimated mined gold in the world.
Obviously, this is a rough estimate, but as a comparison:
- World GDP is: USD87.7 Trillion (World Bank 2019)
- Total Market Capitalisation of World Stock markets is: USD86 Trillion (CNBC 2019)
- Total Global Debt: USD253 Trillion (CNBC 2020)
- Market Capitalisation of Apple Stock: USD2 Trillion (2020)
Thus, in comparison to other financial assets, one can see how truly finite and scarce gold is. And while both debt and equity value can be created very easily, sometimes seemingly out of thin air, the same cannot be said for gold.
- Above-ground stocks – World Gold Council
- How much gold is there left to mine in the world? – BBC News
- 2019 gold output to hit new record high of 109.6Moz – S&P Global Intelligence
- Global debt hits new record of $253 trillion and is set to grow even more this year
- Global stock markets gained $17 trillion in value in 2019
- World Bank national accounts data, and OECD National Accounts data files.