Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
The World Gold Council (WGC) warns that gold is getting harder to find and produce. The leading authority on the global gold market points to rising operational costs, governmental red tape, and dwindling supplies as the main roadblocks to the mining industry.
The Numbers
- Q1 2024 gold mine production is up 4% on the year.
- It can take up to 20 years for a new mine to produce gold.
- Only 10% of global gold deposits contain enough metal to justify mining operations.
- Over 76% of minable gold reserves have already been extracted.
- Gold prices have increased over 33% year-over-year.
Why Investors Should Care
The projected output of gold mining production may seem technical, but it directly impacts the average investor. As gold supplies tighten, prices tend to rise. This is especially true during bouts of economic uncertainty as market sentiment shifts toward safety and stability. Investors paying attention have an opportunity to snatch up physical gold at relatively low prices for higher yields in the future.
Market Impact
Gold supplies are constricted by surging demand and hampered mining output. Gold ore production grew year-on-year in 2024 but remained relatively flat over most of the last decade, according to the WGC. Simultaneously, central bank gold demand is extending to new highs. This one-two punch has pushed gold prices to a fresh record of $2,483.78/oz.
Expert Insights
The gold mining boom in the first quarter of 2024 is misleading, according to John Reade, WGC’s Chief Market Strategist.
“[T]he bigger picture…is that, [gold production]…plateaued around 2016, 2018 and we’ve seen no growth since then.”
Gold availability is a major challenge but not the only factor squeezing global supplies.
Reade suggests, “It’s getting harder to find gold, permit it, finance it, and operate it.”
This highlights the gauntlet of obstacles facing the gold market.
What’s Behind the News?
As gold demand escalates and prices rise, people are increasingly concerned with what’s going on behind the scenes. The WGC keeps its fingers on the pulse of the gold market through in-depth research and analysis. The results of these reports are often released to the public to help investors stay abreast of important developments.
Future Outlook
Gold prices are likely to move higher as the yellow metal becomes harder to find. In fact, experts have raised their gold price predictions. For example, both Bank of America and Citibank expect gold to hit $3,000. This anticipated growth is compounded by consistent gold demand as central banks and retail investors binge on physical gold. At current rates, gold mining could reach unsustainable levels by 2050.
Actionable Takeaways
Think Big Picture
Various factors influence gold prices such as mining production, demand, market health, and investor sentiment. Paying close attention to these variables can help investors make better-timed and more rewarding investment decisions.
Consider Investment Timing
Timing your investment is of increasing importance. Gold prices could jump at any time in response to constrained supplies. Those who get in earlier could see more returns in the long run which means larger nest eggs and greater portfolio protection.
Talk to an Advisor
Every gold asset has unique strengths and considerations. Speaking with a precious metals advisor can help ensure your gold investments line up with your broader goals, ensuring every investment is worthwhile.
Want to Learn More About Gold?
The precious metals advisors at Scottsdale Bullion & Coin can answer your questions and put you on the right path on your gold investment journey. Contact us by calling toll-free at 1-888-812-9892 or using our live chat function.