The world may not have enough gold available for purchase to meet immediate demand from investors for the precious metal, making the need even greater for old and unwanted gold jewellery to be recycled.
Indeed, there is a growing demand for recycled gold because there is not enough new gold mining going on. It’s an expensive practice to fund but the current state of the world economy means there is less investment around but a greater need for gold from investors who want somewhere safe to put their money.
The issue is that not all investors buy physical pieces of gold, but instead put their cash into pledges and undertaking – ‘paper gold’.
Niel [correct] Pretorius, the chief executive of South African gold mining company DRD Gold told Mining Weekly: “I think there’s going to be a fairly significant shortfall.
“There’s a shortage of real gold cover [for] the paper gold position that’s out there. Definitely, no doubt in my mind about that… and I think we’re going to run out of new gold.”
A high proportion of the gold that is circulating in the world is ‘old’ gold. The beauty of the precious metal is that it does not rust or corrode, and can be melted down again and again without losing any of its quality.
That is why scrap gold – old, broken or unwanted jewellery or pure gold items – is so important when it comes to meeting demand for the precious metal. A large proportion of recycled gold goes into producing new jewellery but some will also be used to make gold bullion bars and coins bought by investors.
Because demand is currently so high, the prices that are being paid for unwanted gold items have also increased in recent months, so it’s worth sorting through your jewellery box to check whether there’s anything there you can convert into cash – and play your part in meeting the global need for the precious metal.