Mar 1, 2023
Recycling gold? Oxford researcher says it's something to consider
Making the case to recycle gold instead of mining it
Investors often seek safety in gold, especially during inflationary times, but one expert says instead of mining it, reusing what is already above ground should be considered.
A circular gold economy would involve the transition out of gold mining to instead, recycling the commodity that is already available above ground, Oxford researcher Stephen Lezak, who specializes in commodities and infrastructure, told BNN Bloomberg in a TV interview on Tuesday.
“When we say a circular gold economy, we’re talking about a world in which gold is still consumed. People will still buy it for jewelry, for investment, it will still wind up in technology and medicine, but the vast majority of it will come from recycled sources,” he said.
Lezak argued that the world already has thousand of years of above ground gold stocks to draw on, and these stocks already supply about 25 per cent of the gold that’s consumed every year.
“Gold functions as an investment because of its scarcity, and so making it more scarce is in some ways taking gold and making it into renaissance art, or a Stradivarius violin. It doesn’t become any less valuable — in fact the opposite is true."
In what he refers to as a ‘responsible drawdown’ of gold mining, a slow but steady transition out of mined gold would not bring a shock to the markets. Instead, investors would still retain the same amount of capital they have currently invested in gold, but the physical representation would be smaller, he added.
The price of gold rose to US$1,847.60 as of March 1. Over the past two years, gold prices have been volatile as tight monetary policy measures have made the commodity costlier to hold.
“We would be talking about redirecting and essentially being smarter about this resource that is so costly to extract,” he said.
Check out the full video at the top of the article to learn more.