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By Catholic Online (NEWS CONSORTIUM)

4/2/2013 (1 year ago)

Catholic Online (www.catholic.org)

Scarcity of the precious metal is key to its inherent worth

Gold among the most precious of all metal is reliant on its scarcity for value. Unlike copper, iron, and zinc, all common metals, gold is intended to confer worth the world's monetary fortune. How much gold is there in the world? According to Warren Buffett, one of the world's richest investors, the total amount of gold in the world could fit into a cube with sides of just 67 feet.

There are inexact figures of the amount of gold in the world as gold has been mined for a very long time, more than 6,000 years

There are inexact figures of the amount of gold in the world as gold has been mined for a very long time, more than 6,000 years

Article Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

4/2/2013 (1 year ago)

Published in Business & Economics

Keywords: Gold, scarcity, worth, super villain, Gold Institute, mining


LOS ANGELES, CA (Catholic Online) - The question arises: how do we know that for sure? The figure, widely used by investors comes from Thomson Reuters GFMS, which produces an annual gold survey. Their latest figure for all the gold in the world is 171,300 tons, almost exactly the same amount a James Bond super-villain would have in an imaginary cube. A cube made of 171,300 tons would be about 68 feet on each side.

Not everyone agrees with the GFMS figures. Other estimates range from 155,244 tons, marginally less than the GFMS figure, to about 16 times that amount, or 2.5 million tons.

Why the differing figures? Part of the reason is that gold has been mined for a very long time, more than 6,000 years, according to gold historian Timothy Green.

The first gold coins were minted all the way back to 550 B.C. under King Croesus of Lydia and quickly became accepted payment for merchants and mercenary soldiers around the Mediterranean. When Columbus sailed to America in 1492, GFMS estimates that 12,780 tons had been extracted.

However, the founder of Gold Money James Turk discovered what he regarded as a series of over-estimates.

He believes that the primitive mining techniques used up to the Middle Ages mean that this figure is much too high, and that a more realistic total is just 297 tons.

Turk's figure for the overall amount of gold in the world is 155,244 tons - 16,056 tons, or 10 percent less, than the assessment by Thompson Reuters GFMS, which is a relatively small disparity, but one that at today's prices comes to more than $950 billion.

There are others who think both sets of figures are too low. "In Tutankhamen's tomb alone they found that his coffin was made from 1.5 tons of gold, so imagine the gold that was found in the other tombs that were ransacked before records were taken of them," Jan Skoyles of gold investment firm The Real Asset Company says.

Turk makes only minor adjustments to the GFMS figure for the amount of gold mined since 1492, Skoyles points out that even today China is "not particularly open" about how much gold it is mining.

And in some countries, such as Colombia, "there's a lot of illegal mining going on," she adds.

The Gold Standard Institute believes that if the world emptied our bank vaults and jewelry boxes, we'd find no less than 2.5 million tons of gold; the institute admits that the evidence is somewhat sparse and the figure is a bit speculative.

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