Smuggled Gold Still Funding Global Conflicts

  • Posted Thursday, June 12, 2014 at 01:40 PM

Los Angeles CA, June 11 (Tangible Investments) - by James O’Dell - Gold climbed to a two week high on Wednesday, adding $4.90 or 0.39 percent to close at $1,265.05 an ounce after the World Bank downgraded its global growth outlook for 2014, while a stronger dollar continues to pressure the metals. Silver traded flat at $19.21 an ounce, while the Gold/Silver ratio rose to 65.85.

The World Bank slashed its forecast for global growth this year to just 2.8 percent, from a January projection of 3.2 percent. The U.S. forecast was cut to 2.1 percent, from 2.8 percent, while the European economy is expected to grow by a mere 1.1 percent, and China will slow gradually over the next several years, according to the World Bank. “This news is a bit bullish for the gold market as it hints the world’s major central banks can keep their easy-money policies in place at least a while longer,” said Kitco's Jim Wyckoff, in a note.

Meanwhile, a new report just released by the Enough Project, a D.C. based human rights group, says that "artisanal mined gold continues to fund armed commanders,” in the conflict raging in Eastern Congo. “The U.N. Group of Experts estimated that 98 percent of artisanal gold (roughly 10-12 tons, valued between $380 and $500 million) was smuggled out of Congo in 2013,” according to the report.

“The army continues to be involved in illicit gold exploitation, with senior officers reaping the majority of profits.” The Enough Project concluded that further reforms are needed to address conflict gold. "The gold trade must be thoroughly reformed, both through expanded, responsible development and formalization of the artisanal sector.”

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