Gold is Good for Guyana – 22nd Nov 2012
The Chairman of the Guyana Gold Board, Dr. Gobind Ganga, feels that it may not be necessary for the country to hold a lot of its own reserves in Gold at the Central Bank, simply because the country is a gold producing one. A prominent Gold trader in the country, Nazar Mohammed, had hinted in two letters to the press recently, that because of current financial rumblings worldwide and more so in the United States, small states like Guyana should hold significant gold reserves.
Dr. Ganga says, while he does not want to be drawn into a discussion with some persons in the private sector on the worth of holding gold, the Gold Board by its very operations has a gold reserve. The Gold Board Chairman said that Guyana earned around 517 Million US dollars from Gold exports. He noted that once the price is stable, and the miners and dealers continue to sell through the Gold Board, the country will have significant reserves daily in gold.
However the Chairman cautioned that it may not be necessary and can be financially risky if the Board started to speculate on the fluctuating prices of gold. While the gold price has been climbing steadily, the Gold Board operates based on the London morning and afternoon fix. The country earns nearly seven percent royalty and taxes from Gold sales. The Guyana Gold and Diamond Miners Association has noted that so far for this year, the country has surpassed last year’s target of 350,000 ounces of gold. At current world market prices, that is over half a billion US dollars in sales to the Guyana Gold Board or licensed traders.
There is also the contention that some of Guyana’s gold may be smuggled out of the country and sold elsewhere thus denying the Treasury here of Royalties and Taxes.
The Gold traders locally and internationally have pointed to the economic conditions in the US and some parts of Europe, that can result in recession. When this happens, the traders contend, gold will swing into full gear. The dealers stated that price of gold shows the market has been bullish for years, pushing the price of gold up four-fold over the past ten years.
Owning raw gold or silver and gold stocks will bring real wealth. Gold producing countries like Guyana also stand to progress tremendously and will rapidly boost its economy as a result of this reality according to one prominent trader.