African Gold’s Position Amid the Global COVID-19 Crisis

Blockchain technology could help the African gold industry boost the continent’s economic growth, even during the coronavirus pandemic.
Western perception of precious African resources usually tends to focus on the diamond trade. However, amid an ongoing pandemic, gold usually surfaces as both one of the most in-demand and discussed assets in the world.Historically known as a risk-off asset, meaning its price is decoupled from most financial markets, gold is a safe-haven asset sought by financial institutions and retail traders alike. While the COVID-19 fallout has sparked widespread losses across global markets, with the price of gold also falling, the precious metal usually weathers financial storms better than most assets. This is in tune with the 2008 financial crisis where there was an initial dash for United States dollars as businesses had to settle debts and margin calls, which precipitated the 2009 to 2012 gold bull run.During crises, gold is in high demand. And for African countries, historically that has presented problems as foreign entities seek to coerce and bully Africa for gold and other precious resources. With a systemic financial crisis looming, Africa may turn to technology to protect its resources.Huge deposits but small gains, same problemsMost gold reserves around the world are hoarded under the control of major Group of Seven central banks and stored in military-grade secure institutions, such as Fort Knox in Kentucky. The U.S. leads all countries in gold reserves by a significant margin, and South Africa and Algeria are the only African nations to crack the top 30 countries by gold reserves globally.This comes even though the Witwatersrand mines in South Africa have accounted for more than 40% of the world’s total production of gold. In addition, Ghana and Sudan, which are not even in the top 50 countries by gold reserves, are actually among the top 15 largest producers of gold in the world.Clearly, something is amiss.Just like how foreign companies have plundered diamonds at a dire political and social cost to Africa, gold has been sequestered from the coffers of African countries atop some of the largest reserves on Earth.Vast gold deposits in Africa have been pilfered by foreign countries over many decades.African history is a wealth of intrigue into the gold market too. Mansa Musa, the 10th emperor of Mali, was a historically renowned figure who consolidated much of western Africa in the 14th century and is widely considered one of the richest rulers in history. Stories of his empire rife with opulence signal one of ancient Africa’s most flourishing periods. The price of gold in Cairo was said to have plummeted after Musa’s visit following generous handouts of the precious metal on his pilgrimage to Mecca.However, times are much different now. The extended colonization of Africa in the years following Mansa Musa set the stage for the extraction of Africa’s precious minerals by foreign governments and adventurers. Those colonial restraints are now removed, but a more underhanded pilfering of gold by the private sector of foreign countries continues.

Post written by our friend Chris Cleverly and Syndicated from Cointelegraph
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