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Gold Scarcity in Perspective as “Peak Gold” Looms

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Of course, gold’s value lies in its scarcity.

But just how scarce is it, really? We all have a vague idea, but you will probably still find the reality quite shocking.

A series of 12 stunning visualizations of gold published by Visual Capitalists puts the rarity of gold into vivid perspective.

Demonocracy.info put together this series of 3D visualizations showcasing all of the world’s gold mined thus far using gold bullion bars. (Note: these visualizations are a couple of years old and optimistically have the value of gold pegged at $2,000 per ounce, presumably for the ease of calculations.)

gold-in-world-cube


If you stack all of the gold mined in history in the form of 400 ounce bars, it wouldn’t even reach to the of the Statue of Liberty’s waist. Melted down, it would fit into an Olympic-sized swimming pool.

Demonocracy.info put together similar visualizations for silver.

silver amounts

The scarcity of gold takes on greater significance considering we are likely nearing “peak gold.” In other words, the amount of gold mined out of the earth will begin to shrink every year, rather than increase, as it has since the 1970s.

Last year, Goldcorp CEO Chuck Jeannes announced the world will reach “peak gold” in 2014 or 2015.

As gold production declines, the miner’s job becomes harder, as companies compete for increasingly rare deposits. Discoveries have already tapered off. In 1995, 22 gold deposits with at least two million ounces of gold each were discovered, according to SNL Metals Economics Group. In 2010, there were six such discoveries, and in 2011 there was one. In 2012: nothing.”

Just last April, Goldman Sachs analysts predicted gold production would peak in 2015, saying there are “only 20 years of known mineable reserves of gold and diamonds.” The report warned that mineable reserves of rare commodities like gold may dwindle to extreme scarcity within two decades, meaning easily mined gold will continue to get harder and harder to find.

And as we reported last week, with many mining companies in the red, analysts expect gold production to drop for the first time since 2008.

Given all of this data, it appears the gold industry will soon enter 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. Gold finds its value in its scarcity, and that scarcity looks like it will only increase.

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