Does Golds have “eternal value”? There are 150,000 tons of gold on the earth

August 11, 2016

Does Golds have "eternal value"? There are only 150,000 tons of gold on the earth.

Does Golds have “eternal value”? There are 150,000 tons of gold on the earth

This article is originally referred from iForex New

Gold has been used and traded as “eternal value” by humans since ancient times. But there are theories that gold in the world will be depleted in the next 20 years if we keep mining gold with the current pace. Is it really possible that gold will be depleted in 2036?

about 150,000 tons of gold on the earth

Gold has been used for transactions as metal with eternal value since ancient times. Major countries such as the U.S. were taking gold standard until several decades ago. Gold standard is a system in which you can exchange currencies with gold at fixed rate. But countries have abandoned gold standard because a growing amount of gold was needed to maintain gold standard in a growing economy.

But even though major countries are not taking gold standard now, the role of gold in economies is still important. Gold prices were surging during 2005-11 as emerging economies such as China and their demand for gold were rapidly growing at that time. Gold prices were around $400 per ounce in 2005 but soared to $1900 by 2011. But it’s been on decline after 2011.

If we look at gold reserves in the world, we can see that gold does not exist indefinitely. They say that the earth has between 150,000-160,000 tons of gold reserves now. But only 50,000 tons are available for mining. Besides, people are mining 2,400-2,500 tons of gold every year.

That is, gold might be depleted in about 20 years. It’s certainly possible, but not very likely. They used to say about 30 years ago that oil in the world would be deleted in the following 30 years. But depletion has never happened.

One reason is that people always try to find new oilfields as well as drilling. Oil might have been depleted if no new oilfield has been found in the last 30 years. But actually, they have been found.

Another reason is that we can drill oil at places where it was not possible in the past. It might not have been common to get oil from underwater oilfield in the past. But now it’s common.

As already said, we still have about 100,000 tons of gold which are not available right now. If we can mine these 100,000 tons, gold will not be depleted in 20 years. It’s also possible to find new gold mines.

The 21st century is not an era of “gold rush” in which you can just find gold, get it and become rich immediately. But individual investors can invest on gold and become rich if they trade successfully.

Original Source: iForex New

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