Platinum - AU$ 1332.6
|
Gold - AU$ 1798.18
LIVE SPOT:
Palladium - AU$ 756.8
|
Silver - AU$ 24.09
 
Your Cart is currently empty.

HOW MUCH GOLD IS THERE?


Less than you think!

There is currently somewhere between 120,000 and 140,000 tonnes of gold in the world 'above ground'.  To visualise this, imagine a single solid gold bullion cube with edges of about 19 metres (about three metres short of the length of a tennis court). That's all that has ever been produced.

Divided amongst the population of the world, there are about 23 grams per person, about 1.2 cubic centimetres each.  This equates to about $250 - $350 worth per person on Earth, depending on the current price.


What's it worth?

The value of that short tennis court sized cube is about $3.6 trillion.  This compares to the US government's sovereign debt of $11 trillion, which until 1971 was part-backed by gold.  The US Gold Reserve is just over 8,000 tonnes - which is about 6% of the total gold ever mined.  It is worth about $200 billion, or 1.8% of the US national debt.

$3.6 trillion is about one fifteenth of the paper based international bond markets, which themselves, at about $55 trillion, are about two thirds composed of western government sovereign debt almost all of which has appeared, co-incidentally, since 1971 and the declared supremacy of paper money, which was what allowed governments to borrow without caution.  The total gold content of the world would pay - at current values - about 7% of the international bond market's sovereign debt.  Of course, 75% of the world's gold is not available to governments - being held privately as jewellery, bullion and coin.  In fact only about 30,000 tonnes, about 1% of the world's sovereign debt is what is held in central bank gold reserves.

Meanwhile the entire gold stock of the world - including the privately held bulk - is much less than one half of one percent of the underwritten risk in the global financial derivatives markets.

The world has placed absolute trust in paper currency denominated assets. Investors have shunned gold bullion for about twenty years while the notional value of paper based financial assets has exploded.


Who owns the gold bullion?

About 30,000 tonnes of the world's gold [20-25% of above ground inventory] is held in central bank vaults.

Major Central Bank Reserves (2000)

Nations & institutions Reserves (Tonnes)
USA 8139
Germany 3469
IMF 3217
France 3025
Switzerland 2590
Italy 2452


The totals for other central banks tail off rapidly after these main holders. Most only hold a few hundred tonnes, and together they make up a bit over 30,000 tonnes in all.

The rest is held by individuals in the form of gold jewellery [approx 70,000 - 80,000 tonnes], coin and privately held bullion [combined at 20,000 tonnes].

90% of the gold above ground has been mined since the start of the California gold rush in 1848. Modern power machinery and chemicals have steadily lowered the price at which gold can be extracted.  The average production cost of the world's biggest producer - South Africa - is about $238 per troy ounce. 1997 industry estimates by the Federal Reserve Board suggested an average production cost worldwide of $300 per ounce.


Gold still underground

Where it is known about with reasonable confidence and can be extracted economically, un-mined gold appears on the books of mining companies as 'reserves'. There remains as reserves about 40% of the total of gold above ground - i.e. about 50,000 tonnes. South Africa has 50% of the world's known stock of un-mined gold.


Inelastic supply

Gold is difficult to find in commercial quantities.  It also takes time, typically 5 years, and plenty of money to bring mines into production.  In this sense, the supply side of the gold equation is relatively constant.

One of the features of this is that boom-times encourage investment which takes a considerable time to work through to production and eventually, to worked out mines.  After a boom, when investment decisions may be made on over-inflated expectations of ultimately achievable prices, there is a tendency to subsequent overproduction and poor prices for a considerable period.

The gold price boom of 1979/80 resulted in steadily increasing production all over the world from a stable base of 1200 tonnes annually to a peak of above 2600 tonnes in 1999. All major producing countries except South Africa substantially increased production in this period.

Production then levelled out and started to dip slightly, as gold mines were exhausted and poorer mines shut.  Also, the uninspiring gold market encouraged a decrease in exploration which now means there are a lower number of new mines coming into production than is expected to be required by the market.


Inflation of the gold supply

Nonetheless, for the time being, gold is still being mined and refined at the rate of almost 2,600 tonnes per year.  Thus, the world supply of above ground gold is increasing - or inflating - at just over 2% annually. At current rates, the gold supply is growing the under-sized tennis court cube at about 12 centimetres a year.  It will reach a full tennis court sized cube in about 20 year's time.


Physical gold quantities

The following table compares kilogram quantities of gold with monetary values, spatial volumes, and meaningful human measurements, to get a feel for the numbers.

Kilograms

Value @ 780$ / Oz

Litres

How much

0.008

$200

0.00041

A British sovereign coin

0.031

$780

0.00161

US Eagle / Canadian Maple coin

0.100

$2,508

0.00518

 

0.500

$12,538

0.02591

 

1

$25,078

0.0518

1 kilo - a golf ball sized sphere

2

$50,156

0.1036

 

3

$75,232

0.1554

 

4

$100,308

0.2073

 

5

$125,386

0.2591

 

6

$150,462

0.311

A can of 'Coke'

7

$175,540

0.363

 

8

$200,618

0.415

 

9

$225,684

0.466

 

10

$250,772

0.518

 

12

$312,000

0.645

A standard 400 oz bullion bar

20

$501,444

1.04

A litre bottle of water

50

$1,357,845

2.59

 

100

$2,507,716

5

A good sized deposit box

1,000

$25,077,160

52

 

10,000

$250,771,802

518

Half a cubic metre - fits in a corner of a small bank vault.

100,000

$2,507,166,025

5,181

 

1,000,000

$25,771,160,000

51,813

A small living room - and more than twice Britain's gold reserve.

8,139,000

$204,102,504,000

421,710

The US gold reserve fits into a town house. Fort Knox is mostly empty space!

30,000,000

$752,320,190,000

1,554,404

The world's total financial reserve of gold (central banks + significant global financial institutions)

100,000,000

$2,507,166,048,000

5,181,347

The approximate total of all privately held jewellery, bullion and coin

140,000,000

$3,501,802,468,000

7,253,886

All the gold in the world - A block with edges 3 metres short of a standard sized tennis court.

 

$11,000,000,000,000

 

The current US sovereign debt (which excludes future pension and health obligations, none of which have been reserved against in the public accounts)


Gold technical facts

The chemical symbol for gold is Au.
Gold’s atomic number is 79 and its atomic weight is 196.967.
Gold melts at 1064.43° Centigrade
The specific gravity of gold is 19.3, meaning gold weighs 19.3 times more than an equal volume of water.

Weight equivalents

1 troy ounce = 1,097 ordinary ounces
1 troy ounce = 480 grains
1 troy ounce = 31.1 grams
1000 troy ounces = 31.3 kilograms
1 gram = .03215 troy ounces
1 kilogram = 32.15 troy ounces
1 tonne = 32.150 troy ounces
1 ordinary ounce = .9115 troy ounces
1 ordinary pound = 14.58 troy ounces

Percent Gold = European System = Karat System

100 % = 1000 fine = 24 karat
91.7 % = 917 fine = 22 karat
75.0 % = 750 fine = 18 karat
58.5 % = 585 fine = 14 karat
41.6 % = 416 fine = 10 karat


Disclaimer

This information is provided for general information purposes only.  Please seek independent professional advice.  Content views and opinions may be sourced from a third party.  BULLIONMARK does not guarantee the accuracy of this information.   BULLIONMARK accepts no liability for any loss incurred as a result of this information.  For more please read our terms and conditions or contact us.

 


   
Terms and Conditions  |   Contact