At the current rate of production, known gold reserves will be exhausted in roughly twenty years. Finding new sources will only become more expensive, but in the meantime, mining company stocks are performing exceptionally well. The gold miners index on Wall Street gained more than 40 percent over the past twelve months.
How secure is gold’s future? That partly depends on the number of geologists available in the coming years to search for new deposits, argued Charles Beard, Assistant Professor of Critical Elements and Minerals at Utrecht University. Whether that number will increase is far from certain. 
“In the European Union and the United Kingdom, several initiatives aim to expand knowledge about critical raw materials. But on the other hand, multiple governments are investing less and less in this field,” said Beard (photo).
In the Netherlands, university funding has been cut, and this has lead to the closure of the Earth Sciences program at Vrije Universiteit Amsterdam, as became clear last Thursday. Utrecht is now the only scientific institution offering such education. Also, a few economic geologists are working at the University of Twente and Delft University of Technology.
This comes at a time when, according to Beard, demand for geologists in Europe is actually increasing—especially because Europe wants to become less dependent on individual countries for the extraction of critical elements like lithium, cobalt, and other minerals essential to energy and technology.
Of course, the demand for geoscientists is rising most significantly as a result of the surging gold price. Over the past twelve months, gold prices rose by about 45 percent, and mining company stocks followed suit. The NYSE Arca Gold Miners Index—now at a record high of around 1,600 points—has gained more than 40 percent over the past year. Market leader Newmont Mining saw its market value increase by 31 percent during that time (currently at a market capitalization of 55 billion dollars) and now feels the heat from number two, Canadian company Agnico Eagle Mines, which posted a nearly 75 percent gain in the same period.
New exploration
Those stock gains come with expectations. According to Beard, companies are using the extra cash to achieve the growth investors now expect. A key part of that strategy is investing in new exploration. Beard, citing figures from the United States Geological Survey, explained: “The world currently has about 59,000 tons of recoverable gold reserves, and around 3,000 tons are mined each year. So if no new sources are discovered, we can continue mining for many years—but in twenty years, the gold will be gone. That realization is driving continued investment in finding new deposits.”
Additionally, mining companies are increasingly investing from a safety standpoint. Beard says, “Geologists aren’t just needed to discover and operate mines; they’re also essential for safely closing and restoring sites after mining ends. In that sense, the industry is working hard to clean up its public image, which has been tarnished by past practices.”
Several factors are pushing the gold price upward. According to the World Gold Council, the cost of gold production has risen from about 1,000 dollars per ounce (28.3 grams) in 2020 to about 1,500 dollars per ounce in 2024. So it’s not just global economic and political trends driving the gold price—it’s also the underlying business economics of gold mining companies.
The companies themselves also publish data on their reserves and long-term outlooks. Market leader Newmont, for example, reported at the beginning of this year that it holds reserves of 134 million ounces—nearly 4,500 tons. The company’s annual production is currently around 5.5 million ounces (183 tons), meaning Newmont can continue producing at this rate for another 24 years.
Global gold reserves (in tons)
Does that mean gold mining companies are a solid investment? The history of the NYSE Arca Gold Miners Index provides some lessons. The previous all-time high (around 1,400) was reached in August 2020, when gold was priced at about 2,000 dollars. Two years later, the gold price had dropped to around 1,600 dollars, and the index had nearly halved. In addition, there are plenty of horror stories about “promising” gold veins that ultimately turned out to be far less profitable. On the Australian Stock Exchange, 165 companies are listed in the Gold subcategory. Dozens of those are penny stocks, with share prices below one Australian cent.
“Speculative positioning”
Investing in gold miners can be highly speculative. According to Paul Jackson, head of Asset Allocation Research at investment manager Invesco, speculation is actually a hallmark of the current gold market boom. Invesco recently published a paper titled “Why is Gold at $3,000?” In it, the firm concludes that the high gold price is partly due to geopolitical uncertainty and partly due to “speculative positioning.”
That’s because the usual supply and demand trends don’t explain the price explosion. Gold supply increased by 5 percent between 2022 and 2024, while demand (from the luxury industry, central banks, and electronics) fell by 3 percent. The tech sector is increasingly replacing gold with alternatives like palladium, platinum, and silver. In contrast, net open interest positions on the nine largest gold exchanges have now reached record highs, according to Invesco.
Jackson described the gold price as “exceptionally high” and doesn’t see it as “the new normal.” “If Trump brings peace to Ukraine and the Middle East, the gold price could easily fall by 1,600 dollars,” he wrote. That wouldn’t bode well for gold mining companies, as his analysis shows. “At a gold price of 3,000 dollars, 99 percent of gold mines are profitable, according to the World Gold Council. At 2,000 dollars, that number drops to 90 percent.”
A gold price below 1,500 dollars would put a significant portion of gold mines in jeopardy. B2Gold, a modest Canadian miner that extracted about 6 tons of gold last year, stated in its 2024 annual report that the total cost per ounce of gold sold was 1,668 dollars. A gold price under 1,500 dollars would therefore trigger a major shakeout in the gold mining sector.