Gold remains a very attractive investment, even in the second half of 2020. Despite the current appeal, there are a lot of concerns regarding ecosystem participants acquiring conflict gold.
Valcambi SA Gets Identified
A recent report issued by Global Witness confirms that there are some concerns over the current gold pipelines. More specifically, the report claims how Swiss gold firm Valcambi SA barely avoided the purchase of conflict gold. Said reserves come from Sudan, a country that will remain difficult to do business with for the foreseeable future.
All of this can be traced back to an ongoing deal between Valcambi SA and Kaloti Precious Metal Group, a Dubai-based firm. Under normal circumstances, a total of 20 tonnes of gold would be purchased from this UAE refiner.
However, the report indicates how the origin of this precious metal may be linked to Sudan. The African nation has been home to a bloody conflict and it has been hit with sanctions, preventing it from trading with other countries. Using gold to bypass these restrictions is ambitious, but it seems as if some of the conflict gold has made it into the hands of Valcambi SA.
This matter has now been deferred to the London Bullion Market Association. A thorough investigation of such bold claims is needed, as it not an accusation to make lightly. It is unclear how long this investigation may last, or what will come of it in the following months.
Finding Real Solutions for Conflict Gold is Crucial
Whether the claims by Global Witness are correct or not, the report highlights core issues in the precious metals industry. There appears to be a glaring lack of oversight of major gold refiners, as well as sourcing standards that may need to be revised accordingly.
For now, both Kaloti and Valcambi refute the claims. Both firms are audited on a regular basis. With no precious trace of conflict gold in their port, the current allegations are quite severe in nature.
That being said, improving the traceability of gold is never a wasted effort. As several key issues have been highlighted this week, letting the feedback go to waste is not an option. Conducting core due diligence is always a priority, and it seems that some changes will need to be made in this regard.
At vaultoro.com we source LBMA approved bullion form the most established gold retailers in europe and will continue working with them to make sure gold is sustainable sourced.