Global Gold Rush Fuels Illegal Trade and Mining, Governments Rush to Buy from All Sources

1. 25-Year Gold Boom:
A prolonged surge in gold demand driven by fears of instability in assets like stocks, bonds, and currencies.

2. Safe-Haven Motivation:
Investors and institutions buy gold as protection against war, terrorism, and economic uncertainty.

3. Paradoxical Outcome:
The gold rush is indirectly fueling violence and instability it is meant to hedge against.

4. Conflict Financing:
Gold revenues are linked to:

o Civil war in Sudan

o Russia’s war in Ukraine

o Sanction resilience of Iran and Venezuela

5. Rise of Illegal Mining:

o Deforestation and mercury pollution in the Amazon rainforest

o Severe environmental and health damage

6. Criminal Involvement:
Terror groups and cartels increasingly entering the gold trade.

7. Case Study – Colombia:

o The Clan del Golfo controls illegal gold mining operations

o Uses profits to fund violence, bombings, and territorial control

8. Supply Chain Contamination:
Gold from illegal or unethical sources enters global supply chains, often undetected.

9. Institutional Complicity:

o United States Mint and Royal Canadian Mint implicated in sourcing questionable gold indirectly

o Use technical loopholes to classify foreign gold as domestic

10. Weak Enforcement:
Despite policies and legal requirements, traceability systems fail to fully prevent illicit sourcing.

11. Economic Structure Issue:

o Gold industry operates on low margins

o Incentive is to increase volume, not scrutiny

12. Complex Supply Chain:
Multiple intermediaries (miners, exporters, transporters, refiners) dilute accountability.

13. Profit Distribution:
Small earnings spread across the chain push actors to accept even suspect gold supplies.

14. Vicious Cycle:
Fear-driven gold buying → higher prices → more illegal mining → more funding for conflict → more instability.

15. Big Picture:
Gold’s role as a safe haven asset is undermined by its growing link to global insecurity, crime, and environmental harm.

[ABS News Service/29.04.2026]

At this point, we’re 25 years into a gold frenzy.

It’s fanned by media personalities like Tucker Carlson — who is now selling gold — and by more staid institutions like central banks and big investment managers in wealthy countries. They’re selling to customers who are all buying for essentially the same reason. They’re afraid everything else — stocks, bonds, even dollars — might lose value in the face of various forms of instability, like war or terror attacks.

But this gold frenzy has had an ironic side effect: It’s led to a wave of destructive mining that funds wars and terror attacks.

Gold funds Sudan’s brutal civil war and Russia’s invasion of Ukraine. Surging gold prices have helped Venezuela and Iran temper the effects of financial sanctions. Illegal miners deforest and pollute the Amazon, poisoning people there with mercury. Terrorist groups are getting into the gold business, too.

Put succinctly, wealthy people and governments buy gold to seek refuge from violence and instability — and in doing so, they fuel more violence and more instability.

That might sound like an abstract connection, and sometimes it is. But sometimes, it isn’t. As my colleagues and I found out in an investigation we published this week, sometimes it takes the form of the U.S. Mint buying and selling gold that comes from mines run by Colombian drug cartels.

Clan del Golfo gold

The miners call the ranch La Mandinga, a name for an evil spirit. When I visited with colleagues, we saw hundreds of miners extracting gold by tearing up the land with high-pressure hoses and excavators, and using mercury to separate the gold from sand.

For the past eight years, Colombia’s biggest cartel, the Clan del Golfo, has run La Mandinga. Nobody mines without cartel permission, and everybody pays. (The cartel called it a “tax” in a statement they put out after our story published.)

The ranch’s open-air mines are both illegal and environmentally destructive. The Clan del Golfo also uses the proceeds to maintain control over its territory through murders and bombings.

Institutions like the U.S. Mint aren’t supposed to be contributing to this sort of thing. The massive gold sellers that supply wealthy governments and investors have detailed policies to keep criminal gold out of their supply chain, and full-time staff to enforce those policies. The U.S. Mint is even required by law to make its investor-grade coins from only U.S.-mined gold.

But for decades, it has instead looked the other way as gold from foreign sources, some unethical or illegal, has entered its plant in West Point, N.Y., to be melted down and made into coins.

The Mint makes coins with a Lady Liberty design out of gold from Mexican and Peruvian pawn shops and from a Congolese mine that is owned partly by the Chinese government, records and interviews show. Some Mint gold has come from a company in Honduras that dug up an Indigenous graveyard for the ore underneath.

The Mint can do that thanks to some technical sleight-of-hand involving a long chain of suppliers, and an effort to redefine the meaning of “U.S. gold” to include foreign gold, as long as the foreign gold’s supplier also buys American gold.

But maybe as important as how the Mint does this is why the Mint and its suppliers do this. The price on gold is so high now that even the most prestigious institutional buyers don’t have an incentive to look too closely at where it’s coming from.

A low-margin business

It’s not just the U.S. Mint that engages in these practices. We also found in our investigation that the Royal Canadian Mint, which claims to use cutting-edge technologies to trace the origins of its gold, does the same thing. Canada is buying cartel gold too.

The prevalence of the practice speaks to how hard it is to stop.

Gold is a commodity, and that makes the gold industry a low-margin business. The big refiners that supply both the U.S. and Canadian mints can’t really demand more than the prevailing world price.

At the other end of the supply chain, the shirtless miners who toil in the dirt for a few grams of gold a day receive about 90 percent of that world price. Between the miner and refiner are a small middleman, an exporter in Colombia, security and transportation companies, and a middleman in Texas.

Each link gets a small slice of the profits; there’s not much left by the time the big refiner gets the gold. And since they can’t raise the price, the only way to make more money is for everyone on this chain, from miner to middleman to refiner, to process more.

In this kind of system, few are willing to turn away even suspect supplies. And so the vicious cycle feeding all this — the anxiety that leads to gold buying, which raises the price of gold, which fuels illegal mining, which funds terrorists, drugs and dictators — churns on.