Gold Fact
Gold Facts?
Jim Sheridan, Sr. VP Corporate Relations ???????????????????????????????????????????????? C-Gold/Great American Bullion
May 2024?
Buying, selling, and trading gold has been going on as far back in history as anyone can remember. Gold is used in many different ways.? It is used to create adornments, currency, production of goods, wealth accumulation, and as a guarantee of ability to pay.? However, very few of those involved in the $170 billion a year gold market has an in-depth knowledge about gold as an element and its importance throughout the history of humanity.
Fortunately for all of us the Gold Fundamentals Organization has provided an excellent discussion of this wonderful element, gold.? Their presentation of the origin of gold and how it evolved through the ages is presented on their website and anyone involved with gold should review the information presented there. Their website can be accessed through this link https://goldfundamentals.org/history-of-gold/. ?
Some of the information from their website is repeated here to highlight some of the main facts about gold.
Let us start with understanding where gold comes from. Gold is created through a process known as stellar nucleoynthesis.? The process requires extreme temperatures and pressure.? Most geological studies of gold deposits will indicate that there was a volcanic activity associated with the deposit.? While the volcano itself could be miles away, the lava flow tunnels below ground will have deposits of gold in them.? There are other theories about the origin of gold.? One is that stars containing gold hitting the earth buried themselves deep in the earth’s core.? Later the volcanic activity brought the gold up to the surface.? Some credence should be given to alternative theories since gold can be found in a pure natural state as well as in combination with other minerals.
The creation of gold is usually not found as a pure element but associated with other minerals. The table below from 911 Metallurgist shows the elements usually associated with gold ore.? To create gold that has a purity of .9999 requires the process of refining to remove the other elements.? A high-grade gold ore mine would contain between 5 and 20 grams of gold per ton (or .15 to .6 ounces of gold).
A world class mine would have 8 to 10 grams of gold per ton and a marginal mine would have less than 5 grams per ton. These are simply guidelines to allow for qualifying a mine’s potential.
Ancient Egypt referred to gold as the flesh of God and there is evidence that Rome was involved in large scale gold mining operations. Even Greek mythology referred to King Midas who was cursed with the golden touch.? The first known gold coin appeared around 700 BC when King Croesus of Lydia introduced them.? Gold coins have been used for centuries as a means of payment and trade.? In modern times, gold coins have been minted with 70 government?owned mints around the world as well as 40 privately?owned mints, producing almost 800 different coin denominations.
The interest in gold is global. Gold is found in many geographic locations across the globe. By any standard, gold is a rare commodity.? And it is not easy to acquire substantial amounts of gold. Mining for gold can be as simple as panning in a stream to using heavy earth moving equipment to extract tons of earth one shovelful at a time.? Commercial mining for gold is expensive and requires many different skills.? Not only do you have to get it out of the ground, but you must separate the metals and then refine the gold.? Those procedures do not include the time it takes to prepare a site to be able to mine.? For example, where do you put all the earth that has been removed and separated from the ore?? When you are removing a ton of earth to get 5 grams of gold you need to move a lot of earth to get one ounce of gold.? You need to remove 28+ tons of earth to get one ounce of gold.?
Gold is expensive because it is rare, it is costly to get out of the ground, and is a highly adaptable metal that can be used for many purposes.? Gold is expensive because it has achieved the status of a means to represent wealth and success, and humans like to show off!
For those readers who are trying to close deals on gold either selling or buying, it would behoove you to know a few facts.? Contrary to what you might have been told or see on the internet, the real world of gold buying and selling is not what you think.? Like you, I have seen those Soft Corporate Offers whereby the buyer wants to buy 1,000 tons a month for 12 months with rolls and extensions.? Right!? On top of that they want an 8-point discount net 6 of the second price setting of the LMBA at the close date.? And they want the gold to have a purity rate of .9999.? I have four of those in my email this morning.? You will see a dore gold offer where there is a discount that is real.? But I have never seen a gold transaction where the gold was .9999 purity, and a discount was offered.? In my 11 years of dealing with offers I have never seen one of those deals close.? You likely have not seen one close either.? We have chased our tails and never made a dime.
When you see an offer to buy gold with a SCO on a letterhead and very official looking and says all the right things you think – well maybe this is the one that will work.? If it is an SCO offering to sell 1,000 tons or some other outrageous amount of gold bullion you need to consider some facts about gold.????????
Facts about gold:
·???????? The World Gold Congress estimates that humans have pulled a total of 187,000 tons of gold from the earth.??
Melted down into a cube it would fit easily into the middle of a baseball diamond infield 90 feet by 90 feet.? It would be worth about $8 trillion in today’s gold prices.?
·???????? The U. S. Geological Survey estimates that there are about 57,000 tons still in the ground to mine.??
If we mine and melt it and add it to the cube above the cube would stand as tall as an adult giraffe.?
·???????? Each year gold miners produce about 3,500 tons of gold, roughly 112 million ounces (about 3175144 kg).?
·???????? Barrick Gold is the largest supplier, bringing 5.53 million ounces to the market.? That equates to 173 tons of gold a year.?
·???????? 1,300 tons of gold are recycled each year.?
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·???????? The total gold market per year is about $170 billion.? For comparison purposes the oil market is $1.7 trillion.
When you see a request to purchase or sell 100 tons of gold a month or they tell you I will buy all you can get you need to consider just how rational that is based on what you now know about the supply of gold. A red flag should go up when you hear that kind of offer.? Just remember, all central banks of the world combined only purchased 1,037 tons in 2023.? China was the largest buyer at 227 tons.? Further for forecast for gold purchases by central banks for the next five years is 600 tons per year combined.
Reality
There are real gold buyers and sellers!!!? Gold buyers and sellers differ on a couple of important characteristics.? There are those gold sellers that are on the TV and advertising all over the place.? These gold sellers want you to call and talk to an “expert advisor” on buying gold.? Think about that for a minute.? Who pays for that advertising?? Is TV time expensive?? Who pays the salaries of those people on the phone talking to you?? They get paid high commissions for selling you gold.? Then there are the retail internet sellers of gold.? They have website and you can go and select the product you want and pay for it.? If you are talking to an “expert advisor” you are paying too much for your gold.
What about sellers and buyers of large quantities of gold?? Real gold sellers and buyers know the way transactions are conducted.? Here is what you need to know:
·???????? High grade gold (.9999) is sold at market prices and is not discounted.? There are no negotiations on price since the market price is determined by the market.? Gold prices change constantly.?
·???????? Sellers of high-grade gold sell at market price plus a small fee.? Everyone knows that and expects that.? Intermediaries are paid a part of the fee.?
·???????? Real gold sellers do not gouge or charge excessive fees.?
·???????? You do not need a lot of paperwork to buy or sell gold.? LOIs, CISs, Contracts are not needed to buy gold.? You only need an online account with the seller/buyer.?
·???????? The purchase or sale transaction process can vary but in general it should be as follows:
o?? Go to the website
o?? Shop products (all prices should be listed)
o?? Open your account
o?? Place your order
o?? Wire the funds to pay for the order
o?? Order is shipped to your designated location
It is really that simple.? The above process is used by gold buyers and sellers that work globally and can actually deliver the gold.
If you want proof of the above process, please visit the following link:
You can buy any amount of gold you want without the hassle of paperwork.???
As of April 12, 2024 the gold market cap was estimated to bever $15 trillion based on the World Gold Council’s estimate of 210,000 tonnes of above ground gold reserves and a spot price of $2300 per ounce. However, estimates of above ground gold reserves can vary by up to 20%. So the market cap could be anywhere from $12,454 trillion to $18,817 trillion.
Contact Information: [email protected] ??