Its prices rose by 10%.. Iraqis accept gold as the dinar continues to decline

Baghdad

- From mid-December 2022 until now, the Iraqi dinar has continued its dramatic decline against the US dollar, reaching the level of 1,610 dinars against one dollar, at a time when the official price of the dollar is 1,465 dinars.

With the decline of the national currency and the high rates of poverty and unemployment, the Iraqi gold markets recorded a great demand from customers to buy the yellow metal, amid warnings against buying counterfeit.

And Al-Jazeera Net monitored the latest prices for gold sold in the Iraqi markets as a general average, as it increased by 10% from what it was during the last quarter of the end of last year, and the price of a gram of 24 carat gold reached 89 thousand and 201 dinars ($ 61.05), and 22 carat reached 81 thousand And 768 dinars ($ 55.97), and 21 carat reached 78 thousand and 53 dinars ($ 53.42), and 18 carat reached 66 thousand and 902 dinars ($ 45.79), and 14 carat reached 52 thousand and 34 dinars ($ 35.62), while the price of a kilo of gold was 89 Two million and 200 thousand and 862 dinars (61 thousand dollars).

Goldsmiths' shops in Iraq have recorded a remarkable demand for buying gold in recent days (Al-Jazeera Net)

Safe haven and decoration

And from the Kadhimiya market, which specializes in selling gold in Baghdad, the jeweler Rahim Al-Abadi sees that "most of the Iraqi people prefer to acquire gold, especially in crises, because they do not depend on banks to deposit money because of the lack of confidence in banks."

Al-Abadi told Al-Jazeera Net, "Gold is considered for Iraqis, especially women, as a safe haven and a long-term investment, in addition to being considered a kind of adornment and luxury."

In the Kurdistan region of Iraq, in the north of the country, the jeweler in the gold market, Dana Abd al-Rahman Warti, indicated that there has been a large movement of purchase in Erbil and others within the region during the recent period.

Warti told Al-Jazeera Net that many people in the region buy gold for two reasons.

The first is to profit by selling it after a short period, since gold prices are constantly changing, and the second is to hedge against financial crises, given the lack of confidence of some in the local currency.

And from northern Iraq to Najaf, where the gold selling center is for the governorates of the south and the middle Euphrates, as the Najaf jeweler, Dr. Khairy Abu Shabaa, talks about the demand of customers to buy used gold by 80% in the recent period.

Abu Shabaa specifies to Al-Jazeera Net the reasons that the price of a gram of used gold is 3 thousand dinars ($ 2), and a gram of new gold is 15 thousand dinars ($ 10).

Omar Al-Halbousi: Gold gives security to the investor and buyer more than the declining dinar (Al-Jazeera Net)

Economic reading

From an economic point of view, economic researcher Omar Al-Halbousi identifies several factors that led to an increase in the possession of gold among Iraqis during the period from the end of last year 2022 until the present time.

He explained to Al-Jazeera Net that "some private banks and money-laundering agencies manipulated dollars on the one hand, and smuggled them by land and air towards certain countries on the other hand, in addition to the American emphasis on foreign transfers with the possibility of imposing sanctions on a number of Iraqi banks; matters that led to the decline of the dinar, the rise of the dollar, and the asylum of people." to buy gold.

Al-Halbousi indicated that the precious metal is more important because it is limited in supply and is witnessing an increasing demand, which gives security to the investor and the buyer more than the dinar, which is witnessing a decline coinciding with the rise in inflation and the economic decline in Iraq.

A golden piece with a map of Iraq (Al-Jazeera Net)

gold-supplying countries

According to the information that Al-Jazeera Net surveyed from the goldsmiths market in Iraq about the most gold-supplying countries to the country, the United Arab Emirates was the first until the year 2020, before Turkey topped as the largest source of gold to Iraq, followed by the UAE and then Italy.

Regarding the mechanism for entering gold into Iraq, a spokesman for the Iraqi Ministry of Planning, Abdul Zahra Al-Hindawi, says to Al-Jazeera Net that the import takes place through the official ports, which were specified by Cabinet Resolution No. 335 of 2017, which are Baghdad and Najaf airports through jewelry units in the two international airports, where gold is examined and confirmed of weight and taking all data related to it.

According to government sources, the monthly import rate in general for gold in Iraq amounts to about 7.5 tons, and the customs fee that is levied for each kilogram of it is 250 dollars, with a total of 1 million and 875 thousand dollars.

According to data from the specialized Bloomberg website, Iraq bought 33.9 tons of gold in 2022, while the Turkish Consul General in Erbil, Hakan Karajay, revealed that Iraq imported Turkish gold worth $1.5 billion in 2021.

Ola Al-Tamimi held the supervisory authorities and the Economic Security Agency responsible for the spread of counterfeit gold (Al-Jazeera Net)

Fake gold

The three goldsmiths, whom Al-Jazeera Net met, acknowledge the widespread sale of counterfeit gold in Iraq to achieve the greatest amount of profits, by manipulating prices and weights and stuffing copper inside the gold.

The economic researcher, Ola Al-Tamimi, held the regulatory authorities and the Economic Security Agency responsible for the spread of counterfeit gold as a result of their weakness in monitoring the gold market, as well as the customers’ lack of knowledge of the seals and decorations that the Standardization and Quality Control Authority puts on gold, including the winged bull, the Lion of Babylon and the Malawiyya of Samarra.

In order to deal with fraud, Al-Tamimi proposes, via Al-Jazeera Net, to unify the customs tariff between the center and the region, activate the standardization and quality control system, increase inspection tours of goldsmiths' shops, and educate customers to know the real gold from the fake.

Women are the most popular buyers of gold (Al Jazeera Net)

Jewelry marking law

The economist, Dr. Nawar Al-Saadi, believes that “the amended Jewelery Marking Law No. 83 of 1976 is very excellent, but it needs to be applied firmly by not allowing sales, purchases, and goldsmithing except through companies or shops that have a license to practice the goldsmithing profession, and a gold manufacturing workshop license.” and granting a metal refining license.

Al-Saadi added to Al-Jazeera Net that the law obliged not to grant a license to manufacture or sell and buy jewelry until after the applicant passed the official test, but the Iraqi market today is full of violators who do not have a license to practice the profession, and this led to an increase in commercial fraud.