This Discovery Of An Enormous Gold Deposit Could Change Everything For The Market

It seems to be a golden time to be the government of China. The nation already has a commanding presence in global precious metal markets thanks to its annual production amounting to approximately 10% of world output. China's gold reserves were officially more than 2,000 tons earlier in the year, per the World Gold Council. As if these impressive gold statistics are not enough, China recently announced that it has found potentially the world's largest known gold deposit. This could change everything for global markets and also defer the looming peak gold fears.

Vice head Liu Yongjun of the Chinese Geological Bureau of Hunan Province made the announcement of the incredible find. Located in northeast Hunan county of Pingjiang, these 40 gold veins could hold an astonishing 300 metric tons of the precious metal. Early 3D modeling indicated that even more reserves may exist 1.8 miles beneath the ground.

By any measure this is an enormous haul. The treasure trove has a value of as much as $83 billion at present global gold prices, per Science Alert. The discovery is so large that it might be the biggest ever found. Core sample qualities indicate that each metric ton of the ore might hold almost five ounces of gold (138 grams), compared to a typical high-grade yield find of only eight grams. The claim would be greater than the largest gold reserves in the world today found in South Africa's South Deep Mine.

Without a doubt such an enormous deposit will have massive impacts on both China's gold producing credentials and the world gold market. Even though China produced 268.068 tons of the yellow metal in 2023's first three quarters, the country still uses vastly more than it mines, per Trading Economics. In this same time frame, China demanded 741.732 tons, requiring it to become the world's biggest gold importer.

The discovery has already created a major impact on global markets. After news of the find hit the wires, gold charged to near record highs of $2,700 per ounce. The precious metal prices were already elevated thanks to geopolitical tensions in Ukraine and the Middle East. Investors seek it out for its safe haven history in times of global and regional instability. Gold could be a good place to put retirement savings.

The gold find further highlights global imbalances in the metal's location distribution. Besides China, other significant gold reserves lie in Chile, Russia, Indonesia, Papua New Guinea, and the United States. America has significant production especially at its Cortez and Carlin Trend mines in Nevada, per the Brighter Side news.

Another aspect of the market that this discovery has shaken up is the "Peak Gold" theory. An ancient metal mankind has prized through all of recorded history as a sign that one has made it financially, there may not be enough of it for worldwide demand in the future, according to this concerning idea. Peak gold warns that we may have passed the point where less gold will be mined over time in the future than has been produced in the past.

Consider that around 234,332 tons of the precious metal have ever been mined. Fully two-thirds of this amount has been uncovered in the years since 1950. Although it may sound like a significant amount, the total amount of gold historically mined could go inside a 72-foot square cube, less than the size of one blue whale, per the Brighter Side news.

Even though experts are divided on the peak gold milestone, the discovery of such a vast find in China can only help the declining global production situation. Spokesman Hannah Brandstaetter of the World Gold Council reinforced this idea with, "While the growth in mine supply may slow or decline slightly in the coming years, as existing reserves are exhausted, and new major discoveries become increasingly rare, suggesting that production has peaked may still be a little premature." Thanks to the new Chinese discovery, gold's gradual decline in output over decades may yet be delayed.