- Peak Gold May Already Be Here
- Silver Bullion Tops List of Investments
- Explorers are Returning to Famous Gold Camps
For years, we’ve spoken and written about the potential for ‘Peak Gold‘. Now, in 2024, we may have already hit this critical barrier/era for the precious metal…
According to gold.org, global gold production over the last decade has been relatively flat. Considering the falling average grade of gold mines globally, and the lack of exploration investment over the past decade, total gold production should continue to stagnate.
The World Gold Council explained in early 2023 that:
“Annual mine production increased 1% year over year although remains below the record high seen in 2018.”
Despite record central bank buying in 2022 and almost again in 2023, jewelry still dominates global gold consumption, accounting for 46% in 2023. Gold bars, coins, and ETFs account for about $3 trillion, representing roughly 1% of the $266 trillion financial assets invested globally. If that number were to move to even 2 or 3%, the price of gold would soar as supply would remain relatively fixed.
If Peak Gold is real, what is an investor to do?
Investing in the physical metals (bullion) has been a haven for investors during periods of inflation, massive currency debasement, and tight gold and silver supply.
Dr. Kirk Elliott, founder of one of North America’s largest silver bullion dealers, explains why not all gold and silver products are created equal and why, from an investment standpoint, one should buy bullion over silver or gold coins.
Silver coins have potential numismatic value and may be a worthwhile or profitable investment for some collectors, but Dr. Elliott argues that investors should stick to bullion.
Silver bullion is an easier, less time-consuming, straightforward way to invest, and it comes without the premiums and numismatic risk.
The Struggle of Gold Explorers Explains Weak Production Growth
Aaron discusses the risk/reward challenges gold miners and explorers faced over the last decade. These factors all tie into the ‘Peak Gold’ theory.
The difficulty of finding new gold mines with scale, diminishing grade of deposits, and rising production costs deterred exploration efforts for several years when prices were sub $1,900 an ounce. With gold surging above $2,330, miners and project developers are scrambling to make the next discovery.
The Abitibi Greenstone Belt to Fuel Gold Production in Canada
The Abitibi Greenstone Belt is Canada’s most prolific gold producing region. With over 200 million ounces of gold produced, more than 124 mines have come into operation since 1901, with at least 15 producing more than 3.5 million ounces. Since the first significant discovery in the 1800s, prospectors, geologists, miners, and financiers have embarked on quests in this part of the world not just for buried treasure but for legacy, as they’ve delved into one of the world’s richest gold-producing regions.
With Peak Gold forcing miners worldwide to think differently, many of Canada’s best explorers are heading to the Abitibi hoping to find more gold.
Gold is one of Canada’s most valuable mined commodities, having a production value of $13.2 billion in 2022. Given gold’s rising price, this number likely increased in 2023 (awaiting results), and 2024 should be a record.
Finally, 72% of the gold mined in Canada came from Ontario and Quebec, two mining-friendly provinces, where we expect most Canadian gold project exploration and development to take place in the coming quarters.
