When David Lammy addressed the World Gold Council and London Bullion Market Association this week, he intended to warn his audience about illicit gold. Instead, almost accidentally, he explained why so many people own it.
“Unlike cash,” he said, gold “ does not need a bank account, a password or an internet connection.”
This was meant to sound sinister. To anyone who has ever dealt with a frozen account, a failed payment system, a banking scare, a cyberattack, a currency crisis or the creeping absurdity of modern digital finance, it sounded rather more like a sales pitch.
That is the awkward thing about gold. Its virtues do not become vices simply because criminals notice them. Gold is portable, durable, liquid, borderless and independent of the banking system. Those qualities make it useful to bad actors, certainly. They also make it useful to central banks, families, pensioners, savers, business owners and anyone who has learned, usually the hard way, that financial systems are only as reliable as the institutions running them.
The Deputy Prime Minister’s speech was delivered at a summit devoted to responsible sourcing, sustainability and illicit finance, so one should not pretend that the underlying issue is trivial. Dirty gold is a real problem. Illegal mining scars landscapes, funds armed groups, poisons rivers with mercury, exploits vulnerable workers and helps kleptocrats turn national wealth into private fortunes. No serious participant in the gold market can afford to dismiss that. Provenance, diligence, transparency and enforcement are not nice-to-haves. They are essential to a legitimate market, and something GoldCore fully recognise the importance of.
But there is a difference between tackling criminal supply chains and implying that gold’s independence is itself suspicious. That is where the speech became perhaps more revealing than Lammy’s speechwriters had intended. Beneath the language of responsibility and public safety sat a much older anxiety: the state does not much like wealth that it cannot easily monitor, freeze, tax, trace or even sanction.
Lammy described gold as attractive to criminals because a fortune can fit into the palm of a hand. That is true, as far as it goes, although the same could be said, in different forms, of diamonds, art, bearer instruments, luxury watches, offshore companies, property, bank accounts and government contracts awarded with unusual enthusiasm to people who happen to know the right minister. Criminals use things that work. This is not an argument against the thing itself. It is an argument for law enforcement, proper standards and a functioning moral compass, which admittedly is becoming a fairly niche asset class in public life.
The more interesting point is that gold’s usefulness does not begin with criminality. It begins with distrust. Gold sits outside the promise-based architecture of modern finance. It is not someone else’s liability. It does not require a board resolution, a functioning server, a solvent bank or even a central bank backstop. It is simply there.
This is precisely why governments tend to speak about gold with a peculiar mix of admiration and irritation. London remains one of the great bullion centres of the world, a fact Lammy was happy to celebrate. The city’s vaults, refiners, dealers, clearing infrastructure and Good Delivery system give Britain influence in a market that remains profoundly important to global finance. Yet the same features that make gold valuable to London’s financial establishment also make it uncomfortable for the political establishment. Gold is welcome as a market, useful as a reserve asset and prestigious as a source of institutional authority. It is less welcome when ordinary people notice that it works without a central bank’s or government’s permission.
This tension ran through Lammy’s entire speech. On the one hand, we are told that London has a responsibility to maintain the highest standards in a market that holds around a fifth of global financial gold. On the other, we are warned that gold is uniquely attractive because it can move value without the usual digital checkpoints. The implication is not difficult to spot. Gold is valuable enough for institutions to warehouse, trade, benchmark and regulate. Yet when citizens prize the same qualities, those qualities start to acquire a faintly suspicious glow.
The same contradiction appears in the reference to rising prices. Lammy noted that gold had risen sharply since January 2023, linking that increase to a more turbulent world and greater incentives for criminal gangs. Again, the point is not wrong. Higher prices will attract more smuggling, more fraud and more opportunism, just as higher prices in any scarce commodity invite sharper behaviour. But a rising gold price is not only a criminal incentive. It is also a signal. It tells us that confidence in currencies, debt markets, geopolitics and official competence is not as abundant as the public statements suggest.
Gold does not rise in a vacuum. It rises when investors conclude that too much debt has been issued against too little discipline, when central banks discover that inflation is less transitory than advertised, when governments borrow with the self-control of a toddler left alone in a sweet shop, when sanctions make reserve managers reconsider the safety of foreign assets, and when savers begin to suspect that the bill for all this will eventually arrive through inflation, taxation or financial repression.
That is why central banks have been buying gold with such enthusiasm in recent years. They are not doing so because they have fallen for a conspiracy theory on the internet. They are doing so because they understand, perhaps better than most, that money is political, reserves are strategic and trust is not a renewable resource once squandered. The same institutions that ask citizens to keep faith in fiat money have been adding to their own holdings of the one reserve asset that does not depend on another government’s promise to pay.
This is not to say that gold ownership exempts anyone from law, tax or ethical responsibility. It does not. A properly functioning gold market requires rules, records, assaying, standards and reputable counterparties. Responsible sourcing is especially important because the moral status of gold cannot be separated from the conditions under which it is mined, refined and sold. Nobody should want their wealth preservation strategy to be built on poisoned rivers, coerced labour or the financing of warlords.
But it is equally important not to let the discussion of dirty gold become a broader campaign against private financial resilience. The danger is not that governments will suddenly ban gold ownership in some melodramatic act of confiscatory theatre. The more plausible risk is subtler. Gold becomes increasingly framed as a problem to be managed, a loophole to be narrowed, a source of opacity to be corrected, a legacy asset that must be brought into the bright light of digital supervision for everyone’s safety, naturally.
We have heard this language before. It is the language of public protection used to justify ever more centralised oversight of private life. Cash is suspicious because criminals use it. Privacy is suspicious because criminals desire it. Encryption is suspicious because criminals benefit from it. Gold is suspicious because criminals move value through it. In each case, the criminal use is real enough to make the argument persuasive, but not sufficient to make the broader conclusion wise.
The speech also reminded us why gold endures. It endures because it sits outside promises. It endures because it has no issuer. It endures because no one can print it, default on it, devalue it by committee or reboot it after a systems failure. It endures because, in a world of digital assets, sanctions, frozen accounts and increasingly conditional access to money, it is an asset that simply exists has a certain stubborn appeal.
The government wanted to warn us that gold can be used to escape the system. That is true. The government may have been less keen to remind us why so many people would want part of their wealth outside the system in the first place.
Dirty gold deserves scrutiny and criminal networks deserve enforcement. But gold itself does not become immoral because it works without permission. It is the reason people own it.
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