For thousands of years, humanity’s fascination with gold has never waned. In the past century, gold has become a source of security against the uncertainties of time, driving its price up, especially in the last 25 years. The price of an ounce of gold has exceeded $5,000 due to increased demand from individuals, central banks, major investment managers, and hedge funds.
The main reason for this is growing uncertainty surrounding stocks, bonds, and the dollar, amid ongoing instability, wars, market volatility, and a general lack of security. This obsession with acquiring gold, combined with the scarcity of legitimate sources, has led mining operations to engage in destructive practices, with gold sometimes linked to funding terrorism, crime, and brutal civil wars in Sudan and the war in Ukraine. This has even prompted some of the most reputable institutions, including the US Mint, to have purchased gold from drug cartels, who extract it from mines operated by well-known Colombian gangs.
These gangs often use mercury to extract gold from sand, which is an illegal method that is highly damaging to the environment. These gangs, including Del Golfo, use their proceeds to maintain control over their territory. Institutions like the U.S. Mint should not be complicit in such activities. Major gold dealers supplying wealthy governments and investors have established detailed policies to prevent illicit gold from entering their supply chains. Various law enforcement agencies are responsible for enforcing these policies. However, as a New York Times investigation revealed, the U.S. Mint and others appear to have turned a blind eye to the purchase of gold, including unethical or illegal sources.
The U.S. Mint has been issuing Lady Liberty coins made from gold sourced from Mexican and Peruvian pawn shops, as well as from a Congolese mine partly owned by the Chinese government, according to records and interviews. Some of the U.S. Mint’s gold also comes from a company in Honduras that extracted ore from an indigenous cemetery. The Mint is able to do this through a series of technical maneuvers involving a long supply chain, and by redefining the term “American gold” to include foreign gold, provided that the foreign supplier also purchases American gold.
The widespread nature of this practice makes it difficult to control. Gold is a highly lucrative commodity, and at the other end of the supply chain, miners working in difficult conditions for a few grams of gold a day receive only about 90 percent of its market value. Between the miner and the refinery, there is a small middleman, an exporter in Colombia, security and transportation companies, and a middleman in Texas. Each party receives a small share of the profits, leaving little by the time the gold reaches the large refinery.
Since they cannot raise prices, the only way to increase profits is for everyone in the chain to process larger quantities, even if it leads to environmental damage. In such a system, few are willing to refuse questionable supplies. As a result, the cycle continues, fueled by the anxiety that drives demand for gold. In this way, rising gold prices can contribute to illegal mining and, in some cases, may be linked to financing terrorism, drug networks, and authoritarian regimes.
By Ahmad alsarraf
email: [email protected]
email: [email protected]
