Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Are We Running Out of Gold?

  by    0   7

Last May, the head of the world’s largest mining company said we’ve found all of the gold. Goldcorp CEO Ian Telfer told the Financial Times, “we’re right at peak gold here.”

Peak gold is the point where the amount of gold mined out of the earth will begin to shrink every year, rather than increase, as it has done pretty consistently since the 1970s.

You could blow off Telfer’s comments off as hyperbole or the musings of a contrarian except that he’s not the only person in the gold mining industry worried about decreasing gold production. As a recent Business Insider article reported, many of the top people responsible for supplying the world’s gold say we’re running out of the yellow metal.

Mining execs are concerned because they are no longer finding large deposits to replace aging mines. Last fall, Franco-Nevada chairman Pierre Lassonde said he expects a significant dip in gold production in the coming years.

If you look back to the 70s, 80s and 90s, in every one of those decades, the industry found at least one 50+ million-ounce gold deposit, at least ten 30+ million-ounce deposits, and countless 5 to 10 million ounce deposits. But if you look at the last 15 years, we found no 50-million-ounce deposit, no 30-million-ounce deposit and only very few 15 million ounce deposits.”

And just last month, Seabridge Gold chairman Rudy Frink also expressed concern about shrinking gold reserves.

Peak gold is the new reality in the gold business with reserves now being mined much faster than they are being replaced.”

Barrick Gold president Kevin Dushnisky said even as the number of new discoveries falls off, ore grades and productions levels in existing mines are declining. He said, “Extended project development timelines are bullish for the medium and long-term gold price outlook.”

Consider just one example. South Africa once led the world in gold production. More than 40% of all the gold mined in human history came from the Witwatersrand Basin. But early this year, a study came out saying  South Africa could run out of gold within four decades. Analysts say that at current production levels, the world’s fifth largest gold producer has only 39 years of accessible gold reserves remaining.

Technology could help boost production. As people began worrying about peak oil, new drilling techniques allowed oil companies to reach previously unreachable deposits. Meanwhile, other industries like solar and wind began developing substitutes for oil. But as Business Insider notes:

There’s not really a substitute for gold. And the biggest players in the space are saying we’re running out.”

The Business Insider article notes that it’s hard to pinpoint a top or bottom in gold production, but the looming decline in gold supply could present “an interesting opportunity” for investors, especially considering gold prices have fallen in recent weeks. This may be the time to buy gold.

The long-term fundamentals seem pretty obvious- the people responsible for supplying the world with gold are saying the world is running out of gold and that supply is declining at an alarming rate.”

When we look at the future of gold, it’s easy to get caught up in the latest price move, trade wars and the most recent policy pronouncement by the Federal Reserve. Of course, it’s important to keep abreast of the latest developments in the news cycle. But investors should never lose sight of the most basic fundamentals – supply and demand. The gold industry may well be entering a long-term — and possibly irreversible — period of less available gold. As mining companies find it more difficult to pull gold out of the earth, it will mean less gold for refiners to produce for the consumer market. Remember, gold gets its value from its scarcity.

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Central Banks Start Q4 Buying More Gold

After adding a historically high amount of gold to reserves in the third quarter, central banks kicked off Q4 buying more gold. According to data compiled by the World Gold Council, central banks globally added another 31 tons of gold to official reserves in October.

READ MORE →

Investors Fleeing Housing Market as Bubble Deflates

In another bad sign for a housing bubble that is quickly deflating, investor purchases of single-family homes tanked in the third quarter. Meanwhile, overall home sales continue to tumble and prices are falling.

READ MORE →

Consumer Confidence Declines for Second Straight Month

The powers that be keep telling you that the economy is fine and inflation has likely peaked. But you’re not buying the story. Consumer confidence fell for the second straight month in November as worries about inflation and the trajectory of the economy persist.

READ MORE →

Recession Warning: US Small Businesses Struggling to Pay Rent

In another sign of a struggling economy, small businesses are having an increasingly hard time paying rent. According to Alignable’s November Rent Poll, 41% of US small businesses reported they couldn’t pay their rent in full and on time in November. That was a 4 percentage-point increase from the previous month.

READ MORE →

War on Cash: India Rolling Out Retail Pilot Program for Digital Rupee

We recently reported that the Federal Reserve plans to launch a 12-week pilot program in partnership with several large commercial banks to test the feasibility of a central bank digital currency (CBDC). The US isn’t alone in experimenting with digital currency. India is working on developing a digital rupee and recently announced the second phase […]

READ MORE →

Comments are closed.

Call Now