Executives in the gold industry have raised alarms over a surge in illegal bullion trade, warning that illicit gold flows are increasingly financing armed conflicts and criminal networks. The issue has been driven largely by soaring gold prices, which have nearly doubled over the past two years despite some recent declines, according to key industry figures.

David Tait, chief executive of the World Gold Council, described the situation as a “crisis for the international community,” estimating that the annual value of illegal gold transactions now exceeds $120 billion. Much of the illicit gold is sourced from artisanal and small-scale miners, often operating outside regulated supply chains. Tait linked illegal mining with broader problems such as conflict, sanctions evasion, and illicit finance.

This surge in illicit trade is said to be exacerbating violent conflicts, notably in Sudan and the Democratic Republic of Congo, where armed groups benefit from unregulated gold revenues. Once refined, gold bars lose identifiable markers of origin, allowing criminal gangs and money launderers to easily disguise illicit proceeds.

Ruth Crowell, chief executive of the London Bullion Market Association (LBMA), emphasized the urgency of cutting off these illegal flows, given the ease with which illicit funds can be moved as gold prices rise. She made her remarks during the LBMA and World Gold Council’s Sustainability and Responsible Sourcing Summit.

Governments including the United States, United Kingdom, and United Arab Emirates are exploring measures to address gold smuggling. Potential actions being considered include deploying metal detectors at airports and tightening regulations on gold sourcing. In the U.S., bipartisan legislation currently before Congress calls for a coordinated strategy from the State Department to tackle illicit gold mining and a specific investigation into activities in Venezuela.

In the UK, Deputy Prime Minister David Lammy announced plans to intensify efforts against gold smuggling. London, a global gold trading hub clearing over $220 billion daily through an over-the-counter exchange governed by the LBMA, is central to these initiatives. Lammy highlighted the growing use of gold in conjunction with cryptocurrencies to obscure illegal transactions, and outlined approaches including hosting a summit on illicit finance and leveraging the Joint Money Laundering Intelligence Taskforce.

Despite LBMA’s “good delivery” standards—where approved refineries undergo regular audits and adhere to sourcing guidelines—the proportion of artisanal mined gold entering formal markets remains minimal. Only about 1 percent of LBMA-certified gold originates from artisanal sources, though they account for roughly 20 percent of global gold production, indicating most artisanal gold moves through informal, unregulated channels.

Dominic Raab, former UK Deputy Prime Minister and current head of global affairs at Appian Capital Advisory, urged G7 governments to adopt stronger policies akin to recent U.S. legislative efforts. He suggested coordinated international action and enhanced legal frameworks could help stem the flow of illicit gold and reduce its role in funding conflict and crime.