This week the World Gold Council addressed a question that occasionally surfaces: will the world eventually run out of gold?
Given how often we hear how scarce gold is, it is probably a reasonable question. Mining production reached another record recently, yet the industry faces rising costs, increasingly complex permitting processes and the growing difficulty of discovering large new deposits. It is easy to assume that these trends must eventually lead to scarcity.
The reality, however, is more complicated. Gold behaves very differently from most natural resources because it is rarely consumed. Consider the other commodities we are often confronted with when looking at markets – oil disappears when it is burned, copper is embedded permanently in infrastructure. And then of course you have those that come from the soil, agricultural commodities are eaten. Their usefulness lies in what they become once they are used.
I consider gold to follow a different economic logic. Almost all the gold ever mined still exists somewhere in the world. The metal may have been melted, refined and reshaped countless times, but the substance itself endures. As a result, the annual flow of newly mined gold is small compared with the enormous stock that has accumulated above ground over thousands of years.
And of course, most of that gold is not actively circulating through markets. It is stored, all around the globe, in the hands of billions of people.
Middle East War: Why Money Is Rushing to the Dollar, Not Gold
Gold bars remain in central bank vaults, coins rest in private safes and jewellery is passed down from one generation to the next. In economic terms, a vast portion of the global gold stock simply sits in storage for long periods of time.
So when gold is considered alongside its peers in the commodities complex, it is quite unusual, but this is key to understanding gold’s role in the financial system.
Take central banks for example. Collectively they hold more than 36,000 tonnes of gold in their reserves. Much of this metal has remained untouched for decades rarely generating any income and they contribute nothing directly to economic production.
Yet central banks continue to accumulate gold rather than abandon it. In recent years countries such as China, Poland, India and Turkey (and more recently Czechia) have steadily increased their holdings, often describing gold as an important component of reserve diversification.
This, in my opinion, is some incredibly shrewd reserve management. The global economic environment in early 2026 is marked by an unusual degree of instability, something which has been gaining pace since Russia invaded Ukraine in 2022. Geopolitical tensions have intensified as strategic competition between major powers reshapes the global order.
In such an environment it becomes easier to understand why central banks might value an asset that sits outside the financial system.
Gold performs a role within reserve portfolios that few other assets can replicate. The majority of official reserves consist of foreign currencies and government bonds, both of which represent claims on other states. Their value ultimately depends on the fiscal credibility and political stability of those governments.
Gold is fundamentally different because it is not someone else’s liability. Its value does not depend on a government’s promise to repay debt or a central bank’s ability to maintain price stability. It exists independently of the network of financial obligations that underpins the modern monetary system.
For this reason gold functions less as a return generating asset and more as a stabilising one. Within a reserve portfolio it acts as a form of ballast, helping to reduce overall volatility when currencies weaken or confidence in financial institutions begins to falter.
Private investors tend to approach gold in a remarkably similar way: Individuals who purchase physical gold rarely do so with the intention of trading it frequently. Instead they store it securely and hold it for long periods as a form of financial insurance. The metal remains largely untouched unless economic conditions change in ways that make its stabilising qualities more relevant.
From the perspective of modern finance this behaviour can appear inefficient. Contemporary markets often reward assets that produce income, compound returns or finance new forms of economic activity. Gold does none of these things particularly well.
Yet modern portfolio theory has long recognised that diversification is as important as growth. Numerous studies have shown that even a modest allocation to gold can reduce the volatility of a portfolio because the metal tends to behave differently from equities and bonds during periods of stress.
Gold also possesses characteristics that make it unusually well suited to this role. It does not deteriorate with time, it can be stored indefinitely without maintenance and it remains universally recognised as a form of value. A gold bar that has remained untouched for decades can still be exchanged almost anywhere in the world with relative ease.
These qualities help explain why so much of the world’s gold remains in storage rather than in constant circulation.
The question raised by the World Gold Council therefore leads to an interesting observation. Even if mining production were to slow dramatically in the future, the vast stock of gold that already exists would remain available. Rising prices would encourage recycling and the mobilisation of existing holdings long before any genuine scarcity emerged.
In that sense the gold market is defined less by the discovery of new metal than by the steady presence of the enormous quantity already accumulated.
That presence has become particularly significant at a time when the global system appears to be navigating a period of heightened uncertainty. And against that backdrop the steady, reassuring presence of gold in vaults and safes around the world begins to make more sense.
Its value does not lie in what it produces, but in the stability it can provide when confidence in other financial assets begins to weaken.
Buy Gold Coins
Buy gold coins and bars and store them in the safest vaults in Switzerland, London or Singapore with GoldCore.
Learn why Switzerland remains a safe-haven jurisdiction for owning precious metals. Access Our Most Popular Guide, the Essential Guide to Storing Gold in Switzerland here.
Receive Our Award Winning Market Updates In Your Inbox – Sign Up Here
