Iraqis flock to gold: local vs. imported debate heats up

Shafaq News/ Amid economic instability, Iraqis are increasingly turning to gold as a safe investment, reflecting the age-old saying, "gold is money. Everything else is credit." This surge in gold purchases, fueled by excess funds among citizens, has sparked a debate between the merits of local versus imported gold, each with its own distinct appeal.

Gold Trade Boom

With the gold trade booming, Iraqi markets have seen a significant influx of imported gold, often overshadowing the locally produced variety. Wissam Al-Araji, a prominent gold trader, told Shafaq News Agency that local gold, marked with the winged bull symbol, is superior in quality to imported gold. However, he acknowledged that women often prefer imported gold for its intricate and unique designs.

Sources of Imported Gold

"The main sources of our imports are Gulf countries like the UAE, Bahrain, Oman, and Kuwait, as well as Turkiye and Italy," Al-Araji explained. He noted that Italian Gold, typically sold in 14-carat, is re-processed to 21-carat to meet the Iraqi market's preferences. Despite its high quality, the local gold industry, particularly in Baghdad's Al-Rashid Street, has seen a decline due to the attractiveness of imported gold post-2003.

Value and Pricing

The value of imported gold fluctuates with global market trends, and local jewelers adjust prices based on the international ounce price and the local dollar rate. Ban Nouri, Director General of the Iraqi Standardization and Quality Control Organization, explained that "all imported gold, except that from the Kurdistan Region, undergoes inspection and stamping by the Central Organization for Standardization before hitting the markets." Nouri further clarified that any non-compliant imported gold is returned to customs for re-export. "However, some counterfeit gold manages to enter Iraq through unofficial ports. To combat this, the National Security and Organized Crime units conduct joint inspections, referring cases of counterfeit Gold to the judiciary."

Economic Impact

Economic expert Durgam Muhammad Ali highlighted the relationship between gold trade and economic conditions. "Gold is acquired as a safe haven and store of value during economic instability," he noted, adding that it is also used in money laundering due to its high value and difficulty to track. Manar Al-Obaidi, another economic expert, revealed that Iraq imported over $9.4 billion worth of gold and silver jewelry in the past decade. Specifically, "in 2022, Iraq imported $1.7 billion worth of jewelry from Turkiye alone, making up 15% of Iraq's total imports from Turkiye."

Government Measures

In response to these trends, the Ministry of Planning announced in December 2023 that it would begin inspecting and stamping all imported gold before it enters the Iraqi market, as per Cabinet Decision No. 23671 for 2023. In the past two weeks alone, the Central Organization for Standardization and Quality Control received over 25 kg of imported gold shipments.