Once we understand stock to flow, we can apply it to gold.
Gold was one of the main inspirations for PlanB in creating stock to flow.
Gold Stock to Flow Value
To calculate the stock to flow value of gold, we need to know two things:
- The amount of gold that exists above ground
- The amount of gold mine each year
Calculations
According to gold.org, there are 208,874 tonnes of gold that have been mined.
According to Provident Metals, around 2,500 - 3,000 tonnes of gold are mined each year. Let’s use 2,750 as an estimate.
208,874 tonnes / 3,000 tonnes mined per year = 69.62 stock to flow
Market Cap From Stock to Flow
Using PlanB’s stock to flow formula, the estimated market cap of gold based on a 75.95 stock to flow value would be:
$2.64 trillion USD
This is the formula:
Gold Estimated Market Cap based on stock to flow model:
math.exp(14.6) * math.pow(69.62, 3.3)
The current actual market cap of gold?
Around $13.39 trillion USD.
Gold Value Using Stock to Flow Cross Asset
When PlanB made his original stock to flow formula, only Bitcoin’s priced was used in the data.
PlanB later came out with a new formula for stock to flow, called the stock to flow cross asset model.
This time, PlanB incorporated gold, silver, Bitcoin and other metals into his calculations.
Gold Value Using Stock to Flow Cross Asset
When we calculate the estimated market value of gold using stock to flow cross asset, we get:
13.41 trillion USD
This is the formula:
Gold Estimated Market Cap based on stock to flow cross asset:
math.exp(12.7598) * math.pow(69.62, 4.1167)