I don't trust the angle here. You should also know El Salvador President Bukele just moved to lift mining prohibition in El Salvador because they found TRILLIONS in gold and plan to "dilute the hell out of the gold supply" in Bukele's own words.
And the source is "two people close to the talks" 🙄
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Nations have been trying to dilute the hell out of it for decades. Highest increase in gold supply in the past 5 decades is right at 2%. The gold market is enormous. His new found gold deposit is a stone in the ocean.
There are trillions in gold there, the market cap of gold is 17 trillion.
Trillions with an S!
It’s not about the amount of gold…it’s the cost of mining a certain amount of gold.
Just like “volcano” bitcoin mining will never compete with flare gas bitcoin mining because it is too expensive, if the El Salvador gold is very costly to mine, it won’t be mined.
This dynamic is very much at play in West Canada oil sands. They have so much oil in West Canada…but it is extremely expensive to produce. So when the oil price is below $100/bbl, West Canada doesn’t attract capital. If the price of oil shoots to $120/bbl then capital will find its way to West Canada and the incremental production will put pressure on the price back down towards $100/bbl or lower.
Sure. But’s what the cost to extract it from the ground. Even with large deposits being found. The best mining companies in the world can only extract gold at $1,800 dollars/oz. Even if it was possible to mine all that gold out of the ground. They are just diluting the supply. But they can’t dilute below the price of mining it. Same thing is true about Astro mining. At what cost does it take to get those metals back to earth. Gold would have to be exponential higher.
