How many precious metals are there
How much gold and silver is there in the world?
When do gold and silver prices rise? First and foremost, as soon as there is more demand than supply. Experienced investors buy precious metals as a long-term investment and to add assets. It is all the more important to know whether gold and silver will also be in demand in the future and what resources are available. The offer has a big impact on the price. That is why there is a great unknown for every precious metals investor: How much gold and silver is there in the world?
Price development of gold and silver?
Will everyone who invest in precious metals get rich? Certainly not, but precious metals have two important advantages for experienced investors: First, gold and silver have been a form of investment that maintains value for thousands of years. If you find an old suitcase in the attic today that contains a treasure trove of Reichsmarks (1924 to 1948 official currency in the German Reich) or another currency from bygone times and precious metals, then paper money is worthless. The precious metals, on the other hand, are still valuable. You could exchange the gold or silver for the current currency or use it to make purchases. Another advantage of precious metals: They are very popular in times of crisis and often replace the state paper money system in times of need. Gold and silver are perfect crisis currencies.
Why is the price of gold or silver rising?
There are several factors that affect the price of gold and silver. Basically, in a functioning market economy, supply and demand determine the price. The price regulates the "allocation" of scarce goods or resources.
How could the demand for precious metals develop?
Only one demand factor should be considered here: population growth in the world. UN forecasts assume that by 2050 more than 9.6 billion and by 2100 almost 11.2 billion people will populate the earth. Compared to 2018, an increase of almost 50 percent. More people generally cause an increased need for goods. And since precious metals are important industrial raw materials, a sustained increase in demand can be expected. In addition, the growth of the world population will have a positive impact on the demand for jewelry and investment opportunities in gold and silver. Even if only one factor, the development of the world population, was highlighted, it can be seen that the long-term demand for precious metals will remain sustainable and strong.
What about the supply of gold and silver?
When assessing long-term demand for precious metals, two important questions arise: How much gold and silver is there in the world? Can the supply of gold and silver meet demand in the long term? When looking at the supply side and resources of precious metals, stocks and potentials are important factors.
- Stocks (stocks / private free float / asset holdings)
In addition to the public stocks of gold and silver at the central banks of the governments, a significant part of the precious metals already mined in the form of bars, jewelry, coins or everyday objects are in "private" possession or as a financial investment with investors and banks. These precious metals are largely withdrawn from the supply market or economic cycle or are not freely available.
- Potential (delivery volumes / recovery through recycling)
The not yet extracted resource potential (identified and not yet discovered) of gold or silver cannot be estimated. Even experts are uncertain about the quantities of gold or silver that are still stored in the earth's crust or that can be recovered using an economically justifiable process. According to the current status, the eligible silver resources should last for around 25 years and for gold just under 36 years (resource range - source: estimate by the U.S. Geological Survey). But even these forecasts do not allow any reliable conclusions to be drawn about the actual underground potential. In addition, the topic of recycling will become more and more important.
You can twist and turn it however you want: the resource range of gold and silver is foreseeable. Precious metals remain a valuable, sought-after and scarce commodity. The sustainable demand for precious metals seems to exist in the long term and the supply is limited by natural and finite resources. Investing in precious metals may be an option for one or the other investor. The investment quota should, however, match the total assets, personal risk tolerance and financial situation. Under no circumstances should investors buy gold or silver speculatively, i.e. with a view to short-term profit. The rate fluctuations are simply too high and incalculable. Experts advise keeping a maximum of 5 - 10% of the assets in silver or gold. A long-term investment horizon also offers more security.
The article "How much gold and silver is there in the world?" was written on 04/28/2019.
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