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Let's say in a few decades we can find a new technology to produce gold at low cost which will cause the price of gold to be as low as other metals.

My question is that how would this have an impact on the economy of countries which hold significant amount of golds? And how would this impact on the economy of other countries?

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  • $\begingroup$ The cost of supplying gold has practically nothing to do with the price of gold $\endgroup$ – EnergyNumbers Oct 12 '15 at 12:44
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    $\begingroup$ @EnergyNumbers I don't undrestand, If you can produce tons of gold everyday it means that it will get pretty cheap one day. $\endgroup$ – Arvand Oct 12 '15 at 13:08
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    $\begingroup$ One could argue that diamonds are similar to gold (though diamonds were never used to back up currency). In the 1950s the Soviets opened a huge diamond mine which had a significant impact on diamonds. The price did not collapse. You can read about this here: edwardjayepstein.com/diamond/chap17.htm $\endgroup$ – Giskard Oct 12 '15 at 13:09
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    $\begingroup$ If the gold market is competitive, the technology would lead to a higher supply of gold probably which would reduce the price of gold and hurt countries that hold significant amounts of gold. However I'm not totally sure that it is a competitive market. If it is essentially oligopolistic, like the diamond market is, then nothing should happen. $\endgroup$ – BB King Oct 12 '15 at 13:51
  • $\begingroup$ @denesp I believe your comment should be an answer instead ;0 $\endgroup$ – FooBar Oct 12 '15 at 15:29

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