Jewelers in Colombia, a country which centuries ago attracted gold searchers due the myth of the El Dorado, have produced a joint study in which they show that even as the country exports tons of gold annually, local jewelers are unable to buy even a few kilograms.
“It is incredible that in Colombia, one of the world´s 20 countries that exports the most gold in the world, jewelers cannot find anyone to supply them gold of legal origin,” said a study recently elaborated by jewelers grouped under the local merchant association Fenalco, according to a copy given by a Fenalco official to Latin Business Daily.
In all of 2013, a total of 52 tons of gold were exported and some 48 tons were exported last year so “it is unusual that this sector cannot internally find 63 kilograms per month” to meet their processing needs, according to the study.
“Banco de la Republica, (the country´s bank) which has historically been the industry´s gold supplier, insists that it has no inventory to sell,” the study said.
“And the seriousness of the situation is such that the bigger jewelers are forced to import that same gold which we export,” according to the study.
As a result, “the only losers are not the jewelers but also consumers because the price of jewels goes up 20 percent since they are made with imported gold,” the study said.
According to Fenalco, this situation has been going on for three years without any solution being worked on.
Colombian officials have said that the sharp decline in gold available for sale is a consequence of the liberalization of the gold market. This has caused domestic gold sales to decline from 34.5 tons in 1991, which was 99 percent of the national production, to about 0 percent currently.
Jose Uribe, a Colombian central bank official, has explained that this is not a consequence of the bank having reduced its demand of gold but instead because “it meets strictly tax, risk prevention and money-laundering control laws and reports to authorities of gold purchases which is a formality that some miners and intermediaries prefer to avoid,” as reported by Fenalco.
Gold exported from Colombia is going to the United States, Asia, the European Union, other countries of South America and Switzerland. Colombian jewelers also import from these destinations.
The jewelry industry of Colombia employs 45,000 people with 60 percent of that in production and the rest in marketing. Another 40,000 people work in Colombia in related activities.