The gold price is hovering around $4,400 per ounce this weekend, with relatively little movement as trading activity slows outside the regular business week. But while the short-term gold mar
The gold price is hovering around $4,400 per ounce this weekend, with relatively little movement as trading activity slows outside the regular business week. But while the short-term gold market has been quiet, a much bigger story may be developing beneath the surface.
Gold is now nearly $3,000 per ounce more expensive than it was around its 2022 lows, yet mining exploration has not responded in the way investors might expect. A chart shared by macro analyst Otavio Costa shows global drilling activity remaining far below its 2022 peak, despite the enormous increase in precious-metal prices.
Costa argues that this disconnect could eventually create a serious supply problem. Peter Schiff agrees, saying mining companies and their executives have been too pessimistic about future gold prices and therefore haven’t invested enough to prepare for stronger demand.
The important point isn’t necessarily what happens to gold next week. It’s what today’s limited exploration could mean for gold supply several years from now.
Costa’s chart, using S&P Global Market Intelligence data and estimates compiled by Azuria Capital, tracks global drilling activity across gold, silver, copper, nickel, lead-zinc and several other commodities from 2019 through 2025.
The pattern is striking.
Global drilling activity accelerated dramatically during 2020 and 2021 before reaching a peak around early 2022. The chart shows more than 800 projects drilled during the strongest quarterly period.
Activity subsequently fell considerably.
By 2024, the number of projects drilled had dropped toward roughly 450–500 during weaker quarters. There was some recovery during 2025, but activity remained far below the 2022 peak, and the final period shown on the chart falls back toward approximately 500 projects.
Gold represents the largest portion of the drilling activity throughout the period, making the comparison with today’s gold price particularly interesting.
Costa’s argument is straightforward: higher metal prices haven’t yet produced a comparable exploration boom.
It is remarkable that gold prices are nearly $3,000 per ounce higher than in 2022, yet drilling activity remains near historic lows.The same is true across several other metals.This situation speaks volumes about where we are in the mining cycle:· Reserves are being… pic.twitter.com/A6NCqN4GBY
— Otavio (Tavi) Costa (@TaviCosta) September 5, 2026
That’s unusual because rising commodity prices normally improve project economics. Deposits that weren’t attractive at $1,800 gold can become much more interesting above $4,000.
Yet miners can’t immediately convert a higher gold price into new production.
Costa points to several pressures facing the mining industry: declining reserves, deteriorating ore grades, depressed drilling activity and weaker exploration budgets.
The central issue is time.
Discovering a gold deposit doesn’t mean a company can start producing gold the following year. Exploration must identify an economically viable resource. The company then needs to define that resource, conduct feasibility studies, obtain financing and permits, build infrastructure and finally construct the mine.
That process can take many years.
S&P Global has previously found that major gold discoveries have become less frequent despite substantial exploration spending, while new discoveries often require long development timelines before reaching production.
This is why Costa’s argument goes beyond today’s drilling numbers.
If miners underinvest during a period of strong gold prices, the consequences may not become obvious immediately. Existing mines can continue producing, companies can expand established operations and recycled gold can provide additional supply.
The problem potentially arrives later, when older mines decline and there aren’t enough new projects ready to replace their output.
That is the supply problem Costa believes investors are underestimating.
Read also: ChatGPT Predicts Silver and Gold Prices by the End of 2026
Peter Schiff took the argument one step further.
Responding to Costa, Schiff said he has been discussing the issue for years and argued that investors—including mining-company executives themselves—have been too bearish about future gold prices.
His conclusion was direct:
“Supply will not be there to meet soaring demand.”
Schiff’s argument effectively describes a delayed investment cycle.
I've been pounding the table on this very issue for years. Investors, including mining company executives themselves, have been too bearish on future gold prices. Supply will not be there to meet soaring demand.
— Peter Schiff (@PeterSchiff) September 5, 2026
If mining executives assume unusually high gold prices won’t last, they have less incentive to commit billions of dollars to exploration and new mines. That caution can make financial sense in the short term, particularly after previous commodity cycles left miners with expensive projects that became uneconomic when prices fell.
But if gold instead remains above $4,000 or climbs further, years of conservative investment could leave producers scrambling to expand supply after demand has already increased.
Gold mining supply is already relatively slow-moving. The World Gold Council notes that mine production responds to economic factors over longer periods, while recycling tends to react more quickly to gold prices.
That’s an important distinction for Schiff’s thesis.
A shortage of new mines doesn’t mean the gold market suddenly runs out of metal. Unlike oil, gold isn’t consumed in the same way; enormous quantities of previously mined gold remain above ground and can return to the market at sufficiently attractive prices.
The stronger argument is that new mine supply may struggle to grow fast enough if demand remains elevated for years.
The supply discussion becomes more interesting when viewed alongside continued central-bank demand.
Central banks remained net gold buyers in July, purchasing 23 tonnes, according to the World Gold Council. July marked the fourth consecutive month of reported net buying.
That doesn’t prove demand will continue increasing indefinitely. Central-bank purchases can vary substantially from month to month, and high prices themselves can eventually discourage some buyers.
But it creates an unusual backdrop.
Gold is trading around historically elevated levels, central banks remain net buyers, and the exploration pipeline has not expanded proportionally with the price of the metal.
If Costa and Schiff are correct, the biggest consequence of that imbalance may still be years away.
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The post Gold Price Warning: A Supply Problem the Market Isn’t Ready For appeared first on CaptainAltcoin.
