When Is the Gold Market Expected to Hit the Peak?
Peak gold means the time at which gold extraction across the world reaches the maximum limit, the time from whereon the rate of extraction steadily declines until there is no more gold to be extracted. Though, gold is a product that you can reuse and recycle. 75% of the gold demand is fulfilled by mine production while the rest, 25%, is made up by recycling.
History of Gold Peaks
Since 1900, the world has witnessed four gold peaks. The first gold peak was in 1912, the second in 1940 and the third in 1970, wherein 1480 tonnes of gold was mined by the world. The world saw the latest gold peak in 2001 when the gold mining production reached 2600 tonnes.
These gold peaks have often seen a sharp decline in production owing to wars and economic hardships. In 2019, gold mine production reached 3531 tonnes which were 1% lower than the 3554 tonnes mined in 2018. According to the World Gold Council, although gold production has shown an upward trend in recent years, this trend is likely to level off shortly.
Demand for Gold
Gold as a metal is versatile. It has a broad range of applications in various sectors. Jewellery is the dominant sector driving the demand for gold. Other sectors that have a demand for gold are technology, investments by central banks, ETFs, electronics, industrial and manufacturing.
Gold is becoming increasingly difficult to find. The difficulty translates to high prices as the mining process also becomes complex and expensive. As per the World Gold Council, the below-ground reserves for gold stands at 54,000 tonnes. In case you are interested in purchasing gold at competitive prices in Australia, you could begin by visiting websites like Gold Stackers for more information.
When will the Gold Market Hit Peak?
Experts have varying opinions on this question. Some believe the world has already hit peak gold in 2018, with gold mine production reaching 3554 tonnes. While some thought 2020 would be the year when we would hit peak gold. These hopes did not materialise with the global pandemic taking over the world, people being confined to their homes and the demand drastically dropping.
While some countries like China and Russia saw a dip in their gold production rates, others like the US and Australia saw an upward trend towards Q3 2020. The expectation is that gold production will pick up pace in 2021 – 2023 to make up for the slump witnessed in 2020.
Conclusion | When Is the Gold Market Expected to Hit the Peak?
Even if the market has hit peak gold, the mine production is expected to stay at the 3300-tonne mark in the coming years. There are gold reserves available worldwide, safely tucked in vaults that can be utilised to meet the demand. To know more about the different gold products available for investment purposes, you can visit platforms like Gold Stackers.
