Treasure hunt: People sift through a mixture of sand and pebbles for gold near the village of Soykechar in Uzbekistan on March 6.
| Photo Credit: AFP

Sifting through a greyish mixture of sand and pebbles in the steppe near the southwestern village of Soykechar in Uzbekistan, Khislat Ochilov was searching for gold.

He is one of hundreds of new prospectors trying to strike it rich in a modern-day gold rush in the Central Asian country, chock-full of the precious metal.

A right once preserved for state mining firms, recent regulatory changes designed to boost the economy mean anyone can now hunt for gold.

Mr. Ochilov scanned the shiny flakes that appeared on his panning mat, submerged in a pool of water. Finally, he spotted a piece the size of a grain of rice.

Nearby, Sardor Mardiyev, 28, was hard at work digging through the earth in the vast Navoi region, a district larger than Portugal. He drives his excavator 12 hours a day, six days a week as part of a frenzy for the metal that officials hope will boost Uzbekistan’s output.

‘Global suppliers’

Last year, the country produced 110.8 tonne of gold, putting it in tenth place globally, and its central bank was the second largest net seller in the world at around 25 tonne, behind only Kazakhstan, according to the World Gold Council.

For Uzbek President Shavkat Mirziyoyev — who sees himself as a reformer opening up and liberalising his country’s economy after years of isolation and centralisation — it is not enough. He has ordered gold production to be increased by 50% by 2030.

The potential is there — only 20% of Uzbekistan’s subsoil has been explored to date.

Mr. Mirziyoyev, in power since 2016, has also called for gold bars weighing up to one kilogram to be sold in the hopes of drawing more tourists to his landlocked Central Asian nation.

Zahit Khudaberdiyev, in his 30s, is among hundreds of entrepreneurs who have decided to try their luck since the regulation change. To join the gold rush he acquired the rights to a plot of land for three years at auction.

“Before 2019, we didn’t have the right to mine gold. Some did it anyway at the risk of death — it was dangerous,” Mr. Khudaberdiyev said. His competition includes Kazakh and Chinese prospectors who secured neighbouring plots.

Behind Mr. Khudaberdiyev, trucks and diggers bustle with activity. He said they churn up tonnes of rubble and can help scourers unearth “a daily average of 12 to 15 grams.”

‘Frustrated’ farmers

In Soykechar, where farming remains a vital sector, not everyone is thrilled about the gold rush.

“Prospectors dig where we graze our cattle,” said Erkin Karshiev, a leading farmer in the region.

“Look how the last guys left everything,” the 66-year-old farmer said, motioning frustratedly to holes a dozen metres deep.

Mr. Karshiev said he was “really afraid the animals will fall in”. But his multiple calls on the authorities to resolve the issue have thus far gone ignored.

“We only want one thing: for the gold miners to level the land by filling in the holes when they leave.”

The prospecting rush is also providing an unexpected employment boon for a country where 20% of workers are forced to go abroad for work, mainly to Russia.

Mr. Khudaberdiyev gave the example of his young employees. Before he hired them, one was unemployed, the other a farm hand. “Now they earn three to four million som (240 to 360 euros) on average” each month, Mr. Khudaberdiyev said — a decent salary for the region.

The new wave of gold miners are not allowed to do as they please with the gold they dig up.

All of it must be funnelled through the Uzbek central bank, which trades it for dollars on the global market.

The country’s growing economy depends on injections of foreign currency to support the national currency. The Uzbek som has one of the lowest face values in the world, with $1 worth 12,500 som.

The World Gold Council expects India’s gold demand to rise in 2024 despite higher prices. File
| Photo Credit: Reuters

MUMBAI

India’s gold demand is expected to be subdued in the first quarter of 2024 due to lower jewellery sales, but annual demand is anticipated to rise as consumers adjust to higher prices, the World Gold Council (WGC) said on January 31.

Higher purchases in the world’s second-biggest gold consumer could support prices which are trading near record highs. However, the rising demand for imports could widen India’s trade deficit and put pressure on the rupee.

India’s gold demand has been stuck between 700 and 800 metric tons in the past five years, but it is expected to break out of this range and rise to between 800 and 900 tons in 2024, Somasundaram P.R., CEO of WGC’s Indian operations told Reuters. “Given the fact that high prices have now been absorbed and economic growth is robust, demand is resetting its base to 800 to 900 tons,” he said.

Indian gold demand fell 3% in 2023 from the prior year to 747.5 tons, the lowest since 2020, as prices rallying to a record high curtailed jewellery demand, the WGC said in a report published on Jan. 31. Switzerland, the United Arab Emirates, Peru, and Ghana are leading gold suppliers to India.

In the March quarter, demand is expected to stay low due to fewer auspicious wedding days, the WGC said. Weddings are a major driver of gold purchases in India, with the yellow metal in the form of jewellery being a crucial part of a bride’s attire and a popular gift from family and guests.

Indian gold consumption in the October-December quarter fell 4% to 266.2 tons, as a drop in jewellery demand overshadowed higher sales of coins and bars for investment purposes, the WGC said. Meanwhile, gold smuggling into India gained momentum to approximately around 130 tons from around 110 tons a year ago, Mr. Somasundaram said, due to prices reaching record highs.

The Commerce Ministry has backed a long-standing demand from the jewellery industry to reduce import tariffs on gold bars, Government and industry officials said, amid concern the duties were further harming the India’s faltering jewellery exports.

Pakistan’s gold demand fell 11% to 11.6 tonne during the third quarter of 2023 from 13 tonne in the year-ago period, while Sri Lanka’s gold demand rose substantially to 2.4 tonne from 0.3 tonne. (Representational image only.)
| Photo Credit: Reuters

Global gold demand declined by six per cent to 1,147.5 tonne during the third quarter of 2023 on sluggish demand for bars and coins and from central banks, World Gold Council (WGC)’s latest report said on October 31.

Gold demand in China, the world’s largest gold-consuming nation, rose marginally to 247 tonne in Q3 this year from 242.7 tonne in the year-ago period.

Whereas gold demand in India, the world’s second-largest gold-consuming nation, rose 10% to 210.2 tonne against 191.7 tonne a year ago.

In the case of neighbouring countries, Pakistan’s gold demand fell 11% to 11.6 tonne during the third quarter of 2023 from 13 tonne in the year-ago period, while Sri Lanka’s gold demand rose substantially to 2.4 tonne from 0.3 tonne.

According to the report, the world jewellery demand declined by one per cent to 578.2 tonne in the third quarter of this year from 582.6 tonne in the year-ago period.

“The environment of high gold prices and economic uncertainty was a key driver of the year-on-year decline, particularly in some of the more price-sensitive markets in Asia and the Middle East,” the report said.

“China saw a disappointing third quarter as consumers were reluctant to buy in the face of the very high local price premium, raising expectations of a price correction,” it said.

“Jewellery demand has continued to hold up relatively well in spite of the very high price environment this year. But risks to this sector remain, given the precarious economic scenario in many markets and continued pressure on consumers from the cost of living crisis,” it added.

As per the report, global bar and coin demand fell 14% to 296.2 tonne during the third quarter from 344.2 tonne a year ago.

“The year-on-year decline in bar and coin investment in the third quarter was due to certain pockets of lower demand, notably in Europe (Germany in particular), the U.S., Turkey, Australia and Iran,” it said.

“Investment demand for gold ETFs, bars and coins was anaemic in Q3. At 157 tonne, investment was only half of its five-year quarterly average of 315 tonne,” the report noted.

Gold demand for usage in technology fell three per cent to 75.3 tonne from 77.3 tonne because demand in the electronics industry remained relatively weak, although some sectors showed signs of recovery.

According to the report, central banks’ gold buying also declined 27% to 337.1 tonne in the third quarter from 458.8 tonne in the year-ago period.

“Added to the record-breaking H1 total, year-to-date, the net purchases now stand at 800 tonne. Looking ahead, central bank demand is on course for another strong annual total,” it said.

“The total gold supply increased six per cent to 1,267.1 tonne during the third quarter from 1,190.6 tonne a year ago. Mine production hit a record 971 tonne in Q3; recycled gold rose year-on-year to 289 tonne in the said period,” the report added.