On Wednesday, gold hit an all-time high at around $2,200 per troy ounce. Opinions vary across jewelry and financial markets about the future of gold. Will the market settle back down or are these high prices here to stay? I have a take on this projection but first I want to circle back to "recycled" gold and how these high gold prices drive home the fact that "recycling" gold does absolutely nothing to slow new gold mining.
Gold is not garbage. Gold is a currency. We have to think about the effects of reuse as akin to dollars, not trash. When we reuse ("recycle") money it stimulates the economy because it's available to more people. The same applies to gold. Reusing gold makes it available to more people, creating inflation and stimulating new mining. No one would ever say that we're saving natural resources when we spend (reuse, recycle) dollars. The same is true for gold. Reusing gold is as inevitable as reusing dollars. Using the word "recycled" does not make this process environmentally friendly. It confuses people.
Not convinced? Try this angle: What if I told you, by the year 2050 all of the money that's on the planet is all that there ever will be. Printing will stop, worldwide, forever. All of the dollars, the yuan, yen, euros etc... that are in circulation is all there will be until the end of the earth. If this were true, everyone would want to gather up as much money as possible in the next 25 years. It would be the last chance.
Gold is estimated to be completely mined out of the earth by the year 2050. Central banks are buying gold at historic levels. There was a record demand for gold from Singapore, Turkey, Poland, The US, and China, who is now the top buyer of gold worldwide in 2023. Treasury bonds were once considered risk-free but 2022 was the worst year ever for the Treasury. Many small and mid-level banks were decimated by this bond loss. As trust in Treasury bonds weakens, investments in gold become the best last chance. Cell phones, batteries, and electronics need gold and as technology advances, the demand will continue to rise.
Despite a firehose of gold being cashed-out (melted, "recycled") during these record high prices, the price of gold isn't coming down and mining is surging. My opinion, not investment advice, is that gold will stay strong and over the next 30 years, gold will become even stronger. In times like these, pounds of vintage and antique jewelry gets melted and those fine pieces in your jewelry box become more rare and more valuable. Stash away your heaviest gold jewelry and save it for your children and grandchildren. Take advantage of today's prices because gold may never be as affordable as it once was.