Amid soaring inflation and heightened geopolitical tensions, Iran is increasingly turning to gold as both a safeguard for citizens’ savings and a strategic tool to circumvent economic sanctions. Over the past year, local gold prices have surged more than 80% in Iranian rial terms, surpassing the global benchmark’s 45% increase.
Iran brought in a record 100 tons of gold worth approximately $8 billion in the year that ended March, almost three times its annual imports last year, government statistics show. Yet analysts estimate the actual amount may be almost twice as large based on unofficial inflows from border countries like the UAE and Turkey.
Analysts blame the surge in demand on widespread attempts by people and institutions to protect themselves against economic uncertainty, fueled by sanctions and the ever-present threat of war with the United States and Israel. The Central Bank of Iran has also been reported to be hoarding gold reserves, perhaps at record levels, to strengthen its economic barriers.
While there have been sporadic bouts of volatility like a short-lived spike in gold coin prices to more than IR1 billion ($2,200) in March demand itself is strong. Sanctions relief hopes flared briefly with renewed nuclear talks with the US, but a resolution still eludes, as Tehran refuses to halt uranium enrichment and Washington insists on strict compliance.
Aside from domestic investment, gold is also involved in Iran’s foreign transactions. US reports have it that Russia sold 1.8 tons of gold, valued at about $104 million, to Iran in exchange for Shahed-136 drones with more transactions allegedly lined up.
Most Iranians prefer keeping their wealth at home in gold or US dollars, shunning banks because they fear financial instability or seizures of assets. “It’s like wine that just sits in storage,” said a member of Iran’s Gold and Jewelry Special Committee.
