• There is a huge difference between gold and other common currencies.
• There are markets where gold is sold on a willing buyer willing seller basis.
Image: FILE
The interest in gold all over the world, to the point of sparking civil wars, is because the precious metal is a very strong currency. If I have gold today, the same price in Kenya is what it will trade anywhere in the world. It is an international currency and some countries, especially those that are not friendly to America, prefer it against the dollar.
In Ethiopia, all their gold is bought by the Central Bank. In some countries one can sell gold to a specific bank once it is certified. They can sell and make good profits. Kenya is yet to do this.
That is the difference between gold and the common currencies whose value varies from one state to another. If I go to China with gold, I will sell at international value – which is way higher compared to when I do business with the Kenyan shilling. Its value does not depreciate. You can keep gold and use it anytime.
There are markets where gold is sold on a willing buyer willing seller basis. If you go to Dubai - where 90 per cent of Kenyan gold is refined - there is Gold Souk where gold is sold in various quantities.
The problem is that the demand is always higher than the supply. Like in India, they buy a lot of gold and have put a premium above the world market because of the demand. Tradition demands that when a girl is getting married, the families compete in giving presents to suitors. Rich families may spend even a million dollars or more to acquire gold.
We need to educate our people on the use of gold. In Kenya, we have good amounts but we have put very little to use. In other countries women have jewelry embedded in their fashion. The Western world is different from us as they rarely talk about plots of land they own but speak of how much their spouses are endowed with jewelry. We can have the same here if we manage our minerals well.
The Kenya Chamber of Mines boss spoke to the Star