John Hathaway, manager of the Toqeuvill Gold Fund, has penned an essay Numeraire to Sucissions, on the mining and production of gold, its monetary nature and the attempts by central banks to deny this, and the future of the financial system. Hathaway makes an important point that is rarely understood by gold analysts, most of whom focus on the supply of new gold from mines in relation to the demand for this new supply. As a monetary commodity, all of the gold that exists is held by individuals who are demanding to hold it. And all of this gold could be supplied to the market at some price.
