The truth is, we don’t know. At least, not to any great degree of accuracy, which is odd given how it plays a big part in the global economy.
Thomson Reuters GFMS (Gold Fields Mineral Services) produces an annual gold survey that is used by global investors to gauge such things. The GFMS says there are currently around 171,300 tonnes of gold that have been mined. That amount would fill slightly more than three and a half Olympic swimming pools. Many people, however, disagree with this figure.
Some estimates put the figure as high as 2.5 million tonnes and there are many other guesses in-between. The issue is, we’re all just guessing here. Part of the problem stems from the fact that gold has been mined and viewed as valuable for over five thousand years, so it’s hard to know exactly how much there is. Unlike a paper currency, there is no government controlling production and supply.
Writing for the Gold Standard Institute, Philip Barton points out one of the key flaws in the current thinking: “Included in this 170,000 tonnes is the 10,000 tonnes estimated as being the total amount of gold mined in the history of the world prior to the Californian gold rush of 1848. This was simply a guess.”
That figure is based on the idea that ancient man didn’t have modern mining methods, ergo we must mine more per year in modern times. But as Barton points out, “The Mesoamericans pulled chunks of it out of rivers with their hands, it was so abundant, and today we are mining the residual leftovers — the sparse remnants of what was once plentiful.
Throughout modern history there are indications that gold was plentiful in the past. When Tutankhamun’s tomb was opened in 1922, it contained vast amounts of the stuff. The coffin alone weighed around 1.5 tonnes — the same amount assumed to be mined globally every year before the Californian gold rush. And Tutankhamun was a minor pharaoh, so who knows how much more there was in all the other tombs that were robbed of their riches.
More recently, a court case took place in 1998 concerning the gold amassed by Japanese forces in WWII (known as Yamashita’s gold) that was supposedly stashed in the Philippines. According to one testimony, a basement room in the Marcoses’ [Ferdinand and Imelda] Miravelles summer palace contained a quantity that would weigh over six tonnes. In the same trial, two Australian bullion dealers testified under oath that they had sold $1.63 trillion-worth of bullion on behalf of Ferdinand Marcos in the 1980s.
Given rough prices for that decade it equates to just over 100,000 tonnes of gold. There are many more examples of gold ownership that strongly indicate that the current thinking is way off. But some experts also claim we overestimate the amounts, such as James Turk of the GoldMoney Foundation. “There are widely differing views about the size of the total 1492 stock. The year of Columbus’ first voyage to the Americas is a logical starting point to calculate accumulated world gold production because it marks the beginning of relatively formal recordkeeping,” he points out. By his figures suggest the total is a lower amount of 155,244 tonnes.
What we do know is that since 1946 the official gold stock has grown on average about 1.8 percent per annum. The interesting thing, however, is how we are now using gold and what that means for the amount in circulation. From the days of Croesus marking the first gold coins as currency in 560BC, right up until April’s watch fair in Switzerland showing off the new gold watches, we’ve held onto and recycled gold. In fact, the gold on some of those watches could have been used centuries ago as coins in the old kingdom of Lydia (and many things since) before being remoulded for Swiss timepieces.
But now, according to a British geological survey, 12 percent of gold production ends up being used in the technology industry, notably as gold bonding wire to complete the interconnections in semiconductor chips. These chips aren’t recycled because the quantities are so small in each individual product, so in a way, we are now consuming gold. And although the amount each time is very small, we should note that there are a lot of electronic devices with gold parts currently in use.
The U.S. Geological Survey estimates there are 52,000 tonnes of minable gold still in the ground, so we won’t run out just yet. But the fact remains we don’t really know how much we have in the first place. Officially though, GFMS is the guide, so by its figures, how much is all the gold worth? The website onlygold.com updates daily, based on the current price and known quantity, and at the time of writing the value of all known gold is $7,547,590,772,910 — just over $7.5 trillion. If you want to know what that will buy you, it’s less than half of the current U.S. national debt.
For Esquire magazine.