For the companies exploring for gold, a deposit that has more than one gram of gold for every tonne of earth is an exciting prospect. In fact, in our 2013 report summarizing the world’s gold deposits, we found that the average grade of gold deposits in the world is around that amount: about 1.01 g/t.
Think about that for a moment. One gram (0.035 oz) is equal to the mass of a small paper clip. This small amount of gold is usually not even in one place – it is dispersed through a tonne of rock and dirt in smaller amounts, most of the time invisible to the naked eye. For some companies that have the stars align with easy metallurgy, a deposit near surface, and open pit potential, this gram per tonne deposit may even somehow be economic.
It’s hard to believe that such a small amount of gold could be worth so much, and that is why great visualizations can help us understand the rarity of this yellow metal. Luckily, the folks at Demonocracy.info have done the heavy lifting for us, putting together a series of 3D visualizations of gold bullion bars showcasing the world’s gold that has been mined thus far. Note: these visualizations are a couple of years old and optimistically have the value of gold pegged at US$2,000 per oz, presumably for the ease of calculations.
For those interested, we have also put together a similar slideshow on the topic, showing how much gold, silver, copper, and other metals are mined each year.
Smaller denominations of gold plates: 1 gram, 5 grams, 10 grams, 20 grams, and 1 troy oz of gold.
Larger denominations of gold plates: 50 grams, 100 grams, 250 grams, 500 grams, and 1 kg of gold.
This 400 oz gold bar, at $2,000 per oz gold, is worth the $800,000 cash beside it. The gold bar is extremely heavy, weighing more than three full milk jugs.
Here’s what one tonne of gold looks like. At $2,000 per oz, it’s worth $64.3 million.
Gold is so heavy that the suspension of an average truck would break if it held anymore than pictured above. Even if the truck’s suspension broke, the load of gold in the back could buy 2,660 brand new trucks at an MSRP of $40,000 per truck.
Here’s 10 tonnes of gold compared to 100 tonnes of the yellow metal.
This semi-truck is carrying the maximum load it can legally carry, which is about about 25 tonnes. Here there are 24.88 tonnes of gold, worth $1.6 billion.
The Northrop Grumman B2 Spirit Bomber program cost $44.75 Billion for a total of 21 units built, which averages to $2,130,952,380 per unit. Shown here is the amount of gold it costs to buy one unit.
Here’s the entire gold reserves of the United States government, which is 8,133.5 tonnes.
Here’s the world’s gold reserves by government circa 2012. This is slightly outdated, with China and Russia both having significant increases since then.
All gold mined in history, stacked in 400 oz bars. The 166,500 tonnes here is actually divided into four levels: the bottom level is jewelry (50.5% of all gold), the 2nd level is private investment (18.7%), the third level is world governments (17.4%), and the highest level is other uses for gold such as industry (13.4%).
Lastly, we finish off with an image of all of the world’s mined gold in one cube with dimensions of 20.5m. If it was all melted, it would fit within the confines of an Olympic Swimming Pool.
Want to learn everything you need to know about gold in about 20 minutes? Our five-part Gold Series covers everything from its rich history, supply and geology, demand drivers, investment properties, and market trends.
Animation: How Billionaires are Preparing for the Next Bear Market
No one likes to lose money, even if you have billions to spare. See how the world’s most elite investors – like Ray Dalio – are protecting themselves.
How Billionaires are Preparing for the Next Bear Market
No one likes to lose money, even if you have billions to spare.
It’s why the prospect of a bear market – a prolonged downturn which sees stock prices fall by at least 20% over two months or more – is something that keeps even the world’s most elite investors awake at night.
To hedge against this concern, the world’s billionaires use a variety of strategies and tactics to protect their wealth, including setting up their portfolios with specific asset allocations that can help soften any blow caused by an extended market downturn.
Today’s animation comes to us from Sprott Physical Bullion Trusts and it highlights a strategy being used by billionaires ranging from Ray Dalio to John Tudor Jones II.
Because market sentiment can change so quickly in the market, these elite investors protect themselves by having diverse portfolios that include uncorrelated assets.
While this sounds complicated, uncorrelated assets are simply investments that don’t move up or down in the same direction as the other asset classes in the portfolio. A small allocation to these uncorrelated items can help protect the value of a portfolio when market sentiment changes.
The King of Uncorrelated Assets
What kind of asset classes can be used for this kind of purpose?
While options like real estate, commodities, and cash can contribute to a more diversified portfolio beyond traditional stocks and bonds, many experts say that gold is the undisputed king of uncorrelated assets.
The price of gold doesn’t usually doesn’t move with the wider stock market – and often, because of its history, the yellow metal can even increase in price during the course of a bear market.
Here are some of the reasons billionaires turn towards an allocation in gold:
- Gold has acted as a store of value for thousands of years
- Gold can lower the volatility of a portfolio
- Gold can act as a hedge against inflation in some scenarios
- Gold is a traditional safe haven asset that investors flock to when the market goes astray
To kick off 2019, a new billionaire jumped onto the gold bandwagon – along with previous advocates such as Ray Dalio, David Einhorn, John Paulson, and John Tudor Jones II.
The newest entry to the club is Sam Zell, the pioneer behind real estate investment trusts (REITs). He bought gold for the first time in January, citing that it is “a good hedge” and that “supply is shrinking” as new mine discoveries dries up.
With market volatility back in the fray, it’ll be interesting to see how many more of the world’s elite investors also jump on the bandwagon.
A Brief History of Jewelry Through the Ages
Jewelry has been coveted for centuries by many different cultures. Here’s a look at the history of jewelry, and how it’s evolved into a $348B industry.
Jewelry has been an integral aspect of human civilization for centuries, but it was the discovery and subsequent spread of precious metals and gemstones which really changed the game.
In today’s infographic from Menē, we visualize how the uses and symbolism of jewelry have evolved across time and space to become the industry we’re familiar with today.
Antique, Yet Ageless
There isn’t a single corner of the world that’s untouched by the influence of jewelry.
- Ancient Egypt
Gold accompanied the affluent into the afterlife – the famous 1922 discovery of King Tutankhamun’s tomb was filled to the brim with gold jewelry.
- Ancient Greece and Rome
Jewelry was used practically, and as a protection against evil. The gold olive wreath design was highly popular during this time.
Both men and women in the Sumer civilization wore intricate pieces of jewelry, incorporating bright gems like agate, jasper, or lapis lazuli.
The aristocracy in Aztec culture wore gold jewelry with gemstones to demonstrate their rank. The jewelry also doubled up as godly sacrifices.
- Ancient India
The Mughal Empire introduced the combination of gemstones with gold and silver. Today, pure gold jewelry is often gifted to new brides for financial security.
- Ancient China
Both rich and poor wore jade jewelry for its durable and protective properties. Pure gold jewelry is making a fashion comeback, doubling as a form of investment.
Modern Jewelry: At a Crossroads
Today, jewelry is at once the very same and vastly different from what it used to be.
The industry is worth upwards of $348 billion per year, and it’s not hard to see why. As an alternative asset, jewelry has grown 138% in value over the last decade – only outperformed by classic cars, rare coins, and fine wine.
However, perceptions of jewelry vastly differ. It’s not a stretch to say that Western jewelry buyers are enamored with diamonds, given their enduring association with special occasions – but it’s interesting to note how that ideal was fabricated.
The Invention of Diamonds
The De Beers Group is well known for making diamonds great again. In the early 1900s, the company had already monopolized the diamond trade and stabilized the market, but they faced the challenge of marketing diamonds to consumers at all income levels.
The average American considered diamonds an extravagance, preferring to spend money on cars and appliances instead. The concept of engagement rings existed, but weren’t widely adopted. The #1 slogan of the century – “A Diamond is Forever” – transformed all that.
Even as more companies like Tiffany and Co and Cartier entered the playing field, De Beers had set a successful industry standard. But there’s a catch – diamonds are actually:
- Not all that rare in nature
- Intrinsically low in value
- Easily replicated in a lab
- Decreasing in sales
Despite these caveats, the popularity of diamonds illustrate how Western consumers do not approach jewelry in the same way as Eastern economies, where its function as a store of wealth persists.
The Eastern Gold Standard
In Eastern economies, jewelry often takes the form of pure gold. The reasons behind this difference are surprisingly pragmatic: gold is considered a secure and innate store of wealth that maintains its purchasing value over decades, allowing families to pass wealth from generation to generation.
The rich history of the precious metal has made it a sought-after commodity for centuries, and China and India drive more than half of global gold jewelry demand every year:
|Year||Share of Demand (India + China)||Total Global Jewelry Demand (tonnes)|
Source: Gold Hub – Values have been rounded up to the nearest tonne.
Why are Eastern cultures so attracted to the properties of pure gold?
Part 2 of this series will show why gold is the world’s most incredible metal, and why it’s coveted by billions of people.
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