In 2023 gold demand was the highest on record at 4,899t. The increased desire to own gold should not be a surprise, after all gold has been shown to act as a portfolio preserver in times of economic, geopolitical and financial distress. And we are certainly in those times right now.
But we also find ourselves in concerning, environmental times. It is incumbent upon us to consider the impact of our investments on the wider landscape. Gold has been around for millenia but continues to step up to the plate when it comes to meeting investors’ needs and concerns, both in terms of portfolio preservation and sustainable investing.
Sustainability is taken very seriously by the gold industry, across the supply chain. The Responsible Gold Mining Principles address all the material ESG risks associated with gold mining. And further up the supply chain all LBMA accredited refiners have to follow the Responsible Gold Guidance to ensure that they have appropriate responsible sourcing procedures in place.
No bullion dealer worth their salt will be sourcing newly refined bars or coins that haven’t come from an LBMA accredited refiner or mint. So make sure you look out for that when buying gold bullion. It is worth noting however that ‘grandfathered gold’, the gold refined before 2012 that is held in bullion bank vaults, central bank vaults, exchanges, is not required to have a determination of origin.
It takes very little energy to keep gold (it does not require certain storage conditions) or to trade it. It is not as if once traded it is consumed, instead it will always exist. For example, the American Eagle you bought last week might not be from newly mined gold. Instead it might be one of the first released in 1986 and it could contain gold from hundreds of years prior.
The fact that we are talking about a product that once mined will last thousands of years indicates that it is a sustainable investment. This is because gold is rarely destroyed and so all of the gold ever mined still exists today. And it exists in its original form – as gold – and so is still as investable and as practical as it was when it was originally mined.
Gold has always been recycled, and in the modern age recycled gold is becoming increasingly important. Overall demand for gold was so high in 2023 that recycled gold supply climbed by 9%. Over 25% of gold bought this year will have come from a recycled source, this is significant given it is over 90% less carbon intensive than sourcing mined gold.
It is rare in this day and age to point to a thousand year old asset that takes such little energy to preserve but instead does all the preserving for you.
This article was published this week in Phoenix Magazine’s Sustainable Investing feature, which GoldCore was proud to sponsor.
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