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Gold prices rebound as 80% of artisanal mining illegal
Tue Nov 19 2024
Gold price has been recovering strongly this week. However, the yellow metal, a symbol of wealth and prosperity has a troubling reality hidden beneath its shine.
Some major contributors to the world’s gold supply, Artisanal and small-scale gold mining, or ASGM, are reported to have much of their operations in the shadows of criminal networks and global conflicts.
ASGM supports millions of miners across more than 80 countries and accounts for around 20% of the world’s annual gold supply. However, it’s estimated that 80% of this activity takes place outside legal frameworks. Criminal gangs, corrupt officials, and even state-backed entities are reported to be exploiting this informal sector by smuggling gold through hubs like Switzerland, Türkiye, and Miami.
A report by the World Gold Council, written in collaboration with former UK Deputy Prime Minister Dominic Raab, highlights a particularly alarming connection. The Wagner Group, a Russian state-backed private military company, has reportedly earned over $2.5 billion from illicit gold mining since the invasion of Ukraine. These funds have been funneled directly into Russia’s war machine.
Illicit gold trading fuels conflicts and global security risks
The consequences of illegal mining are that it doesn’t just harm local communities but it also fuels conflicts, funds organized crime, and undermines global security. The environmental and economic impacts are devastating, but the human toll is even worse.
The report, titled “Silence is Golden”, reveals how miners in ASGM communities face abuse, exploitation, and violence. Criminal networks profit at their expense, and enforcement of international laws, like the US Dodd-Frank Act or the EU’s Conflict Minerals legislation, remains strikingly weak."
A robust four-part strategy aimed at protecting vulnerable miners and disrupting the illegal trade fueling wars and terrorism has now been proposed by the World Gold Council. The organization is calling for stronger prosecution of criminal networks, improved transparency, and international cooperation between governments, NGOs, and mining companies.
The question now is whether the international community can step up to stop the flow of illicit profits and bring accountability to this hidden economy. Currently, gold is trading near $2,650. The precious metal has now climbed over 2%, surpassing the critical psychological level of $2,600 to reach a six-day high.
The gold market has seen a notable retreat in speculative interest. According to recent Commitments of Traders (COT) data, Gold speculative long positions drop 20% in 5 weeks
Source: https://tradersunion.com/