Tuesday, September 29, 2009

What if Everyone in the World Wanted a One-Ounce Gold Coin?

A Canadian Gold Maple Leaf, the purest gold co...

Image via Wikipedia

By Jeff Clark

If we’re right about where the price of gold is headed, the general public will someday clamor to buy all things gold. While gold stocks will be where the real leverage is, the rush will start with gold itself. As a gold editor, I have a very natural question: is there enough to go around?

According to the U.S. Census Bureau, there are 6.783 billion earthlings. Meanwhile, CPM Group, a highly respected industry organization, estimates there are 4.8 billion ounces of above-ground gold in the world. And this includes jewelry, electronics, and dental. So, even if everyone around the world volunteered to have their chain, cross, or tooth melted into a coin, we’re already short. Those towards the end of the line are out of luck.

However, it’s worse than that. Of all the physical metal ever mined…

  • 2.1 billion ounces, or 43%, is found in jewelry, decorative, and religious items.
  • Private stock – gold already held by various private parties – accounts for 1.1 billion ounces.
  • Official reserves (central banks, IMF, etc.) stand at 1 billion ounces.
  • Industrial use accounts for 530 million ounces.

Very little of this is likely to come available for purchase in coin form. After all, you’re not selling any of your gold, and neither are many banks or institutions. Most everyone is buying.

What if Everyone in the World Wanted a One-Ounce Gold Coin?


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