Gold on Earth: How much is there really and why the price keeps rising

For many traders, gold is the ultimate hedging instrument – but how much gold is there on Earth anyway? And why does the XAU/USD rate keep reaching new record highs? We answer these questions with a comprehensive overview of the commodity markets.

Global Gold Quantity: Finally, but Practically Infinite

Estimates suggest that approximately 212,582 tons of gold have been mined throughout human history, with two-thirds of it mined after 1950. The special thing about this precious metal: it is virtually indestructible. This means that almost all gold ever mined still exists in some form.

Currently, the above-ground gold stock is estimated at about 190,000 tons. Between 2,500 and 3,000 tons of new gold are added annually – a negligible proportion relative to the total amount. The interesting part: while resources like oil are consumed, over 30 percent of gold is recycled. The remaining supply comes from new extraction. This recycling rate shows that how much gold exists on Earth in the future also depends on reprocessing.

Where Does the Gold Go? Jewelry Dominates Significantly

Of the annual available gold quantities, around 78 percent is processed into jewelry. About 12 percent goes into industry, electronics, and medical technology. The remaining 10 percent is used for financial transactions – a sector relevant to traders.

Over 90 percent of recycled gold comes from old jewelry. This fact underscores that the available gold amount heavily depends on demand drivers in various sectors.

The Future of Gold Mining: Will It Become Scarce?

Theoretically, with 190,000 tons of known gold reserves and an annual extraction of 3,000 tons, it would take over 63 years to deplete this stock. However, this calculation is too simplistic.

New technologies like artificial intelligence and smart data mining could make economically unviable deposits profitable. At the same time, large new deposits are becoming increasingly rare to discover – most major mines date back to earlier decades.

More likely than a total collapse of supply is a paradigm shift: the gold industry could increasingly rely on recycling. Especially gold from electronic waste offers enormous potential to keep the amount of gold on Earth stable in the long term.

Gold Standard to Fiat: How Everything Changed

The history of gold prices is closely intertwined with currency history. Major European countries introduced the gold standard in the 19th century – their paper currencies were backed by actual gold reserves. In 1900, the US set the value of one ounce of gold at 20.67 dollars.

After the Bretton-Woods Agreement of 1944, the world linked its currencies to the US dollar – because America held the most gold reserves. But in 1971, President Nixon ended this system. The Fed was instructed to stop redeeming the dollar in gold. This collapse of the gold standard happened worldwide.

The paradox: since this decoupling, the gold price has skyrocketed.

The Price Rise: From $35 to the $2,300 Mark

Between 1971 and 1980, the gold price surged from $35 to $850 per ounce – driven by oil crises, double-digit inflation, and political uncertainty. Investors sought refuge in physical assets, while stocks seemed too risky.

The next 20 years, the price remained relatively stable at around $500. From 2000 onward, the next upward trend began. Terrorist attacks, the 2008 financial crisis, and the COVID-19 pandemic in 2020 continuously pushed the gold price higher. In 2022, the $2,000 mark was surpassed. In April 2024, gold was trading at about $2,260 per ounce.

The pattern is clear: crisis leads to increased gold demand. In uncertain times, investors seek safety – and gold is the classic safe-haven trade.

Speculation or Fundamental Value? The Gold Bubble Debate

Unlike stocks of companies or real estate with return expectations, gold has no intrinsic economic value. Its price is heavily driven by expectations: people buy gold because they believe it protects against inflation or because others will buy it too.

The largest gold bubble in recent history burst in 2011/2015. The price fell from a high of $1,896.50 to below $1,100 – a decline of over $800. A clear warning sign that how much gold exists on Earth is also subject to psychological factors.

However: compared to other speculative bubbles, this correction was moderate. Gold is often considered a low-risk hedge – at least in normal market phases.

Trading XAU/USD: Technical Outlook

The XAU/USD (Gold against US Dollar) pair is the standard for gold traders. With around $2,250, the pair is near record highs. The triggers are ongoing inflation concerns, geopolitical tensions, and the prospect of Fed rate cuts.

From a technical perspective, a sustained breakout above the $2,200 mark marked an important turning point. The previous record high of $2,223 was surpassed – a strong signal for bulls. The next target is the round $2,300 level.

In the short term, pullbacks to the $2,223 level could offer new buying opportunities. The $2,200 support acts as a critical pivot – a convincing break below could trigger sell signals.

Conclusion: Gold Remains the Ultimate Crisis Metal

The key insight: although the amount of gold on Earth is finite, it is effectively increased through recycling. Demand remains constant – whether for jewelry, industry, or as an investment asset. The price is not primarily driven by scarce resources but by uncertainty and expectations.

With a Fed signaling rate cuts, ongoing geopolitical tensions, and inflation fears, conditions seem favorable for higher gold prices. Traders should remember: like all assets, gold is not guaranteed to rise. Solid risk management and technical analysis are essential to trade XAU/USD smartly.