The dark side of gold

Ever since the Spanish exploitation of the Americas, gold has been associated with human rights abuses and environmental degradation. In response to the various problems, a highly fragmented landscape of gold certification schemes has emerged, which not only drives but also complicates the implementation of effective measures. In addition, different motivations and incentives among investors and jewellers, as well as a lack of knowledge on the part of consumers, challenge the adoption of certified gold.

Nonetheless, all of these groups are relevant when it comes to the issue of certified gold, as gold, unlike other metals, enjoys high demand in the jewellery and financial sectors. Most consumers, on the other hand, are not aware of certified gold, which is why demand from this side is rather low. Also, the fact that sustainability and fair-trade labels are mostly associated with fruit, vegetables and fast-moving consumer goods still prevents gold sellers on the luxury products market from actively promoting certified gold. However, there are significant differences between small, medium and large companies, as Antoinette notes in her research.

With regard to investors, also the higher costs of certified gold are a hindering factor. While gold only makes up a part of the final product in the production of jewellery, investors usually use almost pure gold as an investment, which is why even small price differences can have an inhibiting effect here. Banks therefore play a crucial role in educating investors about the advantages of certified gold.

To shed more light on the complex mechanisms in the gold market and the demand for certified gold, Antoinette van der Merwe conducted interviews with people working in banking, jewellery and certification. The full policy paper with findings and recommendations can be downloaded Download here (PDF, 262 KB).