Has peak gold finally arrived?

Like peak oil, investors have warned about peak gold for many, many years. This has been anticipated for the last few decades, particularly in the late-1990s. But it looks like the prognostication is finally coming to fruition.

Last year, the international gold supply plunged the most since 2008. Moreover, the amount of gold discovered by miners has plummeted approximately 85% over the last decade.

By next year, production from the world’s gold mines will top out, leaving the global supply of the yellow metal to weaken. Stemming from a peak gold period, this could inevitably raise the price of the precious metal, something that gold bugs have been waiting for since the economic collapse.

Gold mining and exploration will become more expensive because it won’t be as easy to come across as it has been throughout history.

From GoldTelegraph:

The price of gold has fallen steadily since 2012. Mining companies are unable to fund new explorations. The time between gold discovery and active mining spans an average of seven years. This is a considerable time span between the exhaustion of old mines and the mining of new ones. And mining companies will find it difficult to bear the expense.

Once productive and seemingly endless gold deposits are depleting quickly. Forty percent of all the gold mined throughout history has come from the Witwatersrand Basin in South Africa. During the 1970s, an excess of 1,000 metric ton of gold was mined each year. In 2017, Witwatersrand Basin’s gold production fell 83 percent compared to 1970, down to 167.1 tons.

China, is still exploring veins for more gold. But how long will it be able to justify the cost as mining for gold that lays deeper in the earths crust? More capital is needed for further gold exploration globally.

Until that happens, the supply of gold will remain low and the demand will rise. This means that in the near future, this could serve as a major catalyst moving forward.

There will always be demand for gold, whether in an industrial capacity or investor needs – or perhaps on a currency basis since several nations are flirting with a commodity-backed system.

Many expect rampant price inflation and money printing to be the driver of rising gold prices, but it could very well turn out to be limited supply and surging demand that will hike gold prices.