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Will gold ever lose its shine?
- MS Blogs
- Nov 26, 2025
- 5 min read
Updated: Jan 15
GOLD has been making headlines, from its sudden price surge to central banks around the world ramping up their holdings. Once known for its quiet stability, gold is entering a new era. But what exactly is driving this shift? And is gold still the undisputed king of reserves?
Why gold has always mattered
For over 4,500 years, gold has shaped economies, empires, and monetary systems. Its place in monetary history is not accidental, but is rooted in a few enduring qualities:
Durability - Gold stands out for preserving its properties for centuries, in contrast to other metals like silver, which blackens, or steel, which rusts.
Malleability - Gold’s malleability makes it easy to shape, mint, and engrave, allowing ancient civilizations to create durable, uniform coins used as currency.
Scarcity - A currency only holds value when its supply is constrained or is difficult to reproduce.
High stock to flow - With a large existing over ground stock and only a small amount mined each year, gold’s scarcity remains stable, preserving its value over time.
Collective trust - Gold has been recognized and accepted as valuable by nearly every civilization, giving it global trust as a medium of exchange.
Gold as a currency
For centuries, gold was money.
Ancient kingdoms such as Maurya, Rome and Egypt used gold coins¹.
In more recent times, gold shaped the global monetary system through the Gold Standard, where currencies were directly linked to a fixed quantity of gold.
Under Bretton Woods, the US dollar was convertible to gold, and other currencies were pegged to the dollar.
This made gold the first universally accepted monetary anchor.
Gold as jewelry
Gold’s aesthetic appeal and cultural symbolism have made it the metal of choice for jewelry for millennia. It has long represented prosperity and rank, a trend that continues today. As per reports India and China currently dominate global jewelry demand with a share of around 55%², where gold is both a symbol of status and a financial safeguard. In many cultures, gold is “stored wealth you can wear”. This dual-use nature keeps jewelry demand extremely resilient.
Gold as reserves
Even after the fall of the Bretton Woods system, gold continues to play a critical role in the global financial ecosystem as part of central bank reserves. Today, gold accounts for nearly 24% of total World’s Foreign Exchange Reserves³, and this share has been rising recently, driven by factors like de-dollarisation, geopolitical tensions, and economic sovereignty.
The demand and supply dynamics
Demand
Gold demand by use-case over the last 15 Years⁴
Figure 1
In recent years, one trend stands out: a sharp increase in central bank demand, especially since 2022. Currently, central banks collectively hold around $5 trillion worth of gold. This surge has been driven both by higher purchase volumes and rising prices. Meanwhile, jewelry demand continues to mirror consumer sentiment and broader economic conditions, falling during events like the COVID-19 crisis, but steadily recovering thereafter.
How much gold is left?
The total above-ground gold, roughly 216,265 tons, is distributed as Follows⁵:
Figure 2
This distribution shows us that gold is primarily perceived as a safe-haven asset even today. Jewelry, as explained before, isn’t just ornamental; in many cultures, it doubles as a form of investment and financial security during crises.
Over the course of history, we’ve mined about $29 trillion worth of gold in today’s value. And surprisingly, if you melted all of it into giant blocks, it would fit into just four Olympic-sized swimming pools.
Currently, the world has about 54,770⁵ tons of identified reserves, with annual mining production averaging around 3,000 Tons⁶. At that pace, we have roughly 18 years of mineable gold left, assuming no new discoveries are made.
That’s a sobering statistic. The era of “easy gold” is clearly over.
As reserves become harder to locate and extract, mining costs will likely rise, and geopolitical tensions could intensify over control of remaining deposits. The global distribution of reserves adds another layer of complexity to this already constrained supply landscape.
The following image depicts the geographical distribution of currently identified minable gold Reserves⁷.
Figure 3
So, what now?
When we put gold’s demand and supply together, a few key insights emerge:
Limited Reserves: With roughly 3000 tons of gold mined every year which amounts to $395.5 billion, central banks can realistically absorb only about 600-800 tons without drastically driving up the prices. This allows for an addition of only $80-100 bn to reserves annually, which is around 0.4% of the current global forex reserves.
Illiquid Above Ground Holdings: A substantial portion of gold is tied up in jewelry, which is relatively sticky. Even as prices rise, this supply is less fluid, limiting supply return into the market.
Central Bank Buying: The sharp uptick in central bank purchases since 2022 has been a major catalyst behind the recent price rally, triggering a ripple effect of additional investment demand.
Industrial Use Decline: Gold’s industrial applications are becoming increasingly uneconomical, suggesting a gradual shift away from technological and industrial demand segments.
In short, while gold may be approaching its ‘final stage’ in terms of new supply, geopolitical tension, economic sovereignty and de-dollarisation is increasing its demand.
Therefore, gold isn’t losing its shine anytime soon. It will continue to play a defining role in global finance, culture, and investment portfolios.
However, our analysis also leaves us pondering a few important questions:
If gold’s future as a reserve asset is limited, what is the next best alternative?
Is de-dollarisation signaling the decline of US dominance in the global monetary system?
Well, that’s how we see it…. But what about you?
That brings us to the end. So …. Stay tuned, stay curious, and stay invested. Until next time.
References
The Royal Mint. (n.d.). A brief history of gold. Retrieved from
https://www.royalmint.com/invest/discover/gold-news/a-brief-history-of-gold/
Retail Jeweller India. (2025). India is largest consumer of gold jewellery in 2024, surpassing China.
Moneycontrol (2025) – Gold’s share in global reserves hits 30-year high.
World Gold Council. (2025, October 30). Gold demand by country. Goldhub. https://www.gold.org/goldhub/data/gold-demand-by-country
World Gold Council. (n.d.). How much gold? Retrieved from
American Standard Gold. (n.d.). How much gold is left to mine on Earth? Retrieved from
https://www.americanstandardgold.com/blog/how-much-gold-is-left-to-mine-on-earth.cfm
Visual Capitalist. (n.d.). How much gold is in the world? Retrieved from
https://www.visualcapitalist.com/sp/chart-how-much-gold-is-in-the-world/ Disclaimer-This article is for educational and informational purposes only and should not be considered as investment advice or a recommendation to buy or sell any securities or adopt any investment strategy.
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