“Jewelry prices have soared recently due to recent developments and tensions between Iran and the United States. People are panicking. They fear that the value of dollar might plummet if tensions continue to escalate,” Diar Hamid, owner of Bayar Golds in Erbil, told Rudaw English.
One mithqal (an Islamic world measurement, equal to 4.25 grams) of gold cost 222,000 dinars ($186) on June 1; its price currently stands at 240,000 dinars ($201), an 8.1 percent rise in less than a month.
“People turn to purchase and invest in gold due to the fear that dollar or pound prices might fall in the aftermath of a conflict between the US and/or UK and Iran. That is why gold prices have recently been soaring,” Hamid said.
Tensions between the US and Iran have been rising for some time. The US imposed sanctions targeting Iran’s oil industry in November 2018, following its withdrawal in May of that year from the Joint Comprehensive Plan of Actions (JCPOA), otherwise known as the Iran nuclear deal.
Acrimony between the two countries has piqued dramatically the past few weeks, following an uptick of violence in the Persian Gulf and Gulf of Oman. Iran shot down a US drone in the Gulf of Oman on June 20, while several oil tankers were attacked in the same area.
The US has repeatedly accused Iran of launching the tanker attacks – accusations Iran has vehemently denied. Trump subsequently signed an executive order on Monday, imposing new sanctions on Iran that specifically targeted Iran’s Supreme Leader Ayatollah Khamanei, his office, and those closely affiliated with him.
Hamid attributed the recent price hike to these regional political tensions. “Local events affect market activity, but don’t bear on gold prices. During times of political impasse in the Region, the gold market plateaus. Intense political activity, however, reinvigorates the market,” he said.
Echoing Hamid, Karwan Hassan, owner of Aros Jewelry in Erbil, told Rudaw English: “Recent tensions between Iran and the United States have greatly impacted the market in Iraq and the Kurdistan Region as well, including the gold market, by virtue of being a neighbor to Iran. These tensions have impacted the market.”
With gold prices rising, supply is currently surpassing demand. “Nowadays more people sell their gold, and fewer people buy it because of the increase in gold prices,” Hamid said.
The flow of tourists from central and southern Iraq to the Kurdistan Region is also contributing to the reinvigoration of the gold market, he explained. “Tourists coming from southern Iraq also buy gold. Five in 20 gold customers are Arab tourists.”
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