The Gold Standard

Muna Al Fuzai

In April, the minister of commerce and industry said during the opening of a gold and jewelry exhibition that the amount of gold entering Kuwait is much greater than the capacity of the inspection department. He pointed out the existence of some shortcomings, adding the ministry is working on avoiding them and upgrading its level of inspection and supervision. Since the goods that are handled are precious, its standard of accuracy and inspection must be, pardon the pun, a ‘gold standard’.

The minister’s statement confirmed two facts for me. Firstly, the minister knows the problem and its dimensions in terms of the gold market, but a comprehensive change is not as easy as we all wish. The second issue here is why such large quantities of gold are brought into Kuwait, as we are a small market. Is it because gold is the safest haven for individuals and countries?

I do not deal with gold on a daily basis, so I forgot this statement until reports this week said ministry of commerce and industry inspectors discovered a fraud of 3.940 kg in gold ornaments valued at KD 50,000 ($165,000) at a jewelry store. The case was referred to the prosecution.

The ministry issued a statement saying that the forged items were gold ornaments of Indian design, adding that cavities in them were filled with cheap materials in order to increase their weight and sell them as pure gold. The ministry assured that it will take all necessary legal procedures against the persons involved in this crime and will increase inspection of gold and jewelry markets to verify the validity and condition of scales and percentage of precious stones set in the items displayed for sale. This is a good effort.

Gold is known to have the highest corrosion resistance of all metals. Also, gold has a fascinating history and a special place in the world. For thousands of years, it has been used as an ornament of kings, a currency and a standard for global currencies. From ancient civilizations to modern days, the use of gold has ranked as a monetary reference. Even at sports tournaments, the winner gets a gold medal. More importantly, for lower income people gold is one of only a few ‘safe’ investments, a way to save up bit by bit and a way to build wealth for the future generations.

So what is the total quantity of gold in the world? Gold is one of the most expensive metals, to the extent that not all countries of the world are open to talk about the amount of gold they own or the volume of gold extracted from mines. In some countries, there are many illegal mining operations too.

Although the price of the precious metal is suitable for buying a bracelet or a gold ring, it is troublesome to governments as a cause of a potential entry into international conflicts for various reasons. Therefore, governments are keen to combat this issue, because it is linked to the role of the government. So, gold is more than just a metal and the confidence of buyers and traders is essential.

I hope the ministry signs a contract with a private company to check and mark gold and precious stones. This case of forgery might be a rare incident, but this doesn’t mean we should let it go and forget about it. The ministry needs to use all tools at its disposal to strictly supervise all jewelry, whether produced in local workshops or coming from abroad.

By Muna Al-Fuzai
[email protected]

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