Gold, the most precious metal, is becoming increasingly harder to find, putting in danger the growth of the gold mining industry, according to the World Gold Council (WGC).
Speaking with CNBC, WGC’s Chief Market Strategist John Reade said that the miners are struggling to discover new pockets of gold, obtain permits, and finance their operation. Reade estimates that the production of gold “plateaued” around 2018, and there has been no noticeable growth since.
“I think the overwhelming story there is: after 10 years of rapid growth from around 2008, the mining industry is struggling to report sustained growth in production,” said Reade.
Reade’s views correspond to a report about gold supply from the International Trade Association for last year. The first half of 2023 hinted at a possible record year in terms of gold production, but an underwhelming second half resulted in a slight increase of just 1%.
The biggest issue that hampers gold production is the fact that many of the prospective areas around the world have already been explored, according to Reade. Additionally, in order to perform large-scale gold mining operations, a preparation period of at least a decade is needed.
Gold prices are showing signs of cooling down after several months of record highs. At the moment, the gold is trading at $2,294.3 per ounce.