Gold has long been treasured for its rarity and value. But what if I told you that the gold we’ve mined so far is just a tiny fraction of what’s left in the Earth’s crust—and that much of it is far beyond our reach? As the world’s most precious metal becomes increasingly scarce, its value is only set to rise. In this blog, we’ll delve into the science behind gold’s limited availability, explore why extracting the remaining gold is nearly impossible with current technology, and discuss why this scarcity is a powerful driver for higher gold prices.
How Much Gold Is Left in the Earth?
Gold is a rare element, making up only about 0.00000031% of the Earth’s crust. To put that into perspective, for every billion atoms of rock in the Earth’s crust, only three of those are gold. This scarcity is a fundamental reason why gold has always been valuable. But even more concerning is that much of the gold remaining in the Earth is located in places that are either too deep, too remote, or too costly to mine with today’s technology.
- Total Gold Mined: Since the dawn of civilization, approximately 201,296 metric tonnes of gold have been mined. If all this gold were to be melted down, it would form a cube with sides measuring just 21.7 meters—small enough to fit comfortably under the Eiffel Tower. While this may seem like a lot, it’s a drop in the ocean compared to the estimated amount of gold still left in the Earth’s crust.
- Gold in the Earth’s Crust: Estimates suggest that there are still about 57,000 metric tonnes of gold left to be mined in the Earth’s crust. However, most of this gold is found in extremely low concentrations in ore, often requiring the processing of hundreds of tonnes of rock to extract a single ounce of gold. Moreover, much of this gold is located miles beneath the Earth’s surface, making it inaccessible with current mining technology.
Why Can’t We Access Most of the Remaining Gold?
Mining for gold has become increasingly difficult and costly. The easiest-to-reach gold deposits have already been exploited, and what remains is often located in geologically challenging areas or deep below the Earth’s surface. Here’s why the remaining gold is so hard to access:
- Deep Deposits: Many of the remaining gold reserves are located several miles beneath the Earth’s surface. The deepest gold mine in the world, Mponeng in South Africa, reaches depths of over 4 kilometers. However, going deeper than this is extremely challenging due to the intense heat (over 60°C) and pressure, which make mining operations dangerous and costly. Extracting gold from these depths would require significant advancements in mining technology, which are not expected in the foreseeable future.
- Low Concentrations: The gold that remains in the Earth’s crust is often found in very low concentrations, known as “low-grade ore.” For example, some deposits contain as little as 1 gram of gold per tonne of rock. Mining such low-grade ore is not economically viable with current technology, as the costs of extraction would far exceed the value of the gold obtained.
- Remote Locations: Some of the richest untapped gold deposits are located in remote and politically unstable regions, such as parts of Africa and South America. In these areas, the infrastructure needed to support large-scale mining operations is lacking, and the risks associated with political instability make it difficult to secure the investments needed to develop new mines.
The Futility of Advanced Technologies in Gold Extraction
While advances in technology have revolutionized many industries, the gold mining sector has seen relatively slow progress in recent years. The limitations of current technology mean that even if we could locate more gold deposits, extracting it remains a formidable challenge.
- Seabed and Asteroid Mining: Some have speculated about the potential for seabed mining or even asteroid mining as ways to access new gold supplies. However, these technologies are still in their infancy and face significant technical and environmental hurdles. For example, mining gold from the ocean floor would require overcoming immense pressure and corrosive saltwater, while asteroid mining would involve unprecedented challenges in space travel and resource extraction. These methods are unlikely to become viable on a commercial scale anytime soon.
- Environmental Concerns: Even if new technologies could unlock previously inaccessible gold deposits, the environmental impact of such operations would be immense. Modern gold mining is already associated with significant environmental damage, including deforestation, water pollution, and the release of toxic chemicals like cyanide. Expanding mining operations to more difficult locations would likely exacerbate these issues, making it increasingly difficult to justify from an ethical and regulatory standpoint.
Why Gold Prices Will Continue to Rise
The scarcity of gold, coupled with the difficulty of accessing remaining deposits, creates a perfect storm for rising gold prices. As supply dwindles and demand remains strong, basic economics tells us that prices will inevitably increase.
- Supply Constraints: Global gold production has been relatively flat in recent years, hovering around 3,200 metric tonnes annually. However, as easy-to-mine gold becomes scarcer, production is expected to decline. The World Gold Council estimates that global gold production will peak within the next decade before beginning a long-term decline. This reduction in supply will put upward pressure on prices, especially as demand continues to grow.
- Growing Demand: Demand for gold remains robust, driven by a variety of factors. In 2022, global demand for gold reached 4,741 metric tonnes, with significant contributions from jewellery, investment, and central bank purchases. Central banks alone purchased over 1,000 tonnes of gold in 2022, the highest level in over 50 years. As more investors seek the stability and security that gold provides, demand is likely to increase further, pushing prices higher.
- Inflation and Economic Uncertainty: Gold is traditionally viewed as a hedge against inflation and economic uncertainty. With inflation rates rising globally and geopolitical tensions creating volatility in financial markets, the demand for gold as a safe-haven asset is likely to remain strong. This sustained demand, coupled with limited supply, will continue to drive prices upward.
Conclusion: The Case for Investing in Gold
The combination of gold’s scarcity, the technological challenges of accessing new supplies, and the strong, enduring demand for this precious metal all point to one conclusion: gold prices are poised to continue their upward trajectory. For investors, this represents a unique opportunity to secure wealth in an asset that is not only rare but becoming even rarer.
At Gold Bullion Partners, we understand the intricacies of the global gold market and can help you navigate these complexities to make informed investment decisions. Whether you’re looking to protect your wealth from inflation, diversify your portfolio, or take advantage of the long-term growth potential of gold, our team is here to guide you every step of the way.
For more information on how to invest in gold and capitalize on its rising value, contact Gold Bullion Partners at 0207 031 8077. Let us help you secure your financial future with the world’s most enduring and valuable asset.
