A Riddle About Gold

In 1950, all of the gold that had ever been mined, panned, found, or otherwise extracted from the Earth added up to 72,088 metric tons. With a global population of 2.493 billion, dividing all that gold up equally among every person alive would have given each almost half an ounce of the precious metal in that year.

Almost seventy five years later, the Earth’s population has grown to exceed 8.162 billion. When it comes to dividing up all the gold that has ever been produced in the world, which of the following statements do you suppose is true?

1. Every person alive today would have less gold than their 1950 counterpart.
2. Every person alive today would have as much gold as their 1950 counterpart.
3. Every person alive today would have more gold than their 1950 counterpart.

Now, we’re going to give you some more information that may or may not be a red herring in helping you determine which statement is true. In 1950, the U.S. market price of an ounce of gold was $35. On 13 June 2025, the market price of gold set a new record high of $3,432.56 per ounce, nearly 100 times more than it was in 1950. Which by the time you read this, may be a record that has been broken. Or perhaps not.

Ready for the answer? Through the end of 2024, all the gold ever extracted from the Earth in human history is estimated to total 216,265 metric tons. If all that gold was equally divided among each of the world’s 8.162 billion people, each would have 0.935 ounces of gold. While still shy of a full ounce, every person alive today would still have about 87% more gold than their 1950 counterpart.

All that business about what the price of gold was in 1950 was and what it has increased to be was indeed a red herring for answering this question. It was intended to trick you into thinking about how prices change because of supply and demand, where today’s higher price make sense if the relative supply of gold per person decreased.

But that’s not what happened. The supply of gold per person increased and so did its price in U.S. dollars.

That can happen in at least two ways. First, the relative demand for gold has increased. Second, the supply of U.S. dollars, or perhaps more accurately, all money on Earth that people might use to buy gold, has risen faster than the supply of gold. If it were just U.S. dollars chasing after gold, $35 in 1950 dollars is about the same as $473 dollars in mid-2025 after inflation.

That would mean almost $3,000 of the increase has come about because some people around the world today have put a much higher demand on having gold and are bidding its price up.

Exit question: Do you suppose those people have more money than sense?

Image credit: U.S. Mint. American Eagle One Ounce Gold Proof Coin. Public domain image.