Iran bets big on gold as it weathers Trump turmoil

Al Jazeera

13-03-2025

Tehran, Iran – Iran has been importing tonnes of gold in the past few months as it hunkers down for more hardships under the United States's 'maximum pressure' policy.
Iran has turned more to gold as a safe haven investment for more than a decade as it weathered never-ending economic storms exacerbated by sanctions over its nuclear programme and regional influence.
But the government of President Masoud Pezeshkian, who took over after an election last summer in the aftermath of his predecessor's death in a helicopter crash, has taken it to new levels in the face of pressure from US President Donald Trump.
By January 19, the end of Dey, the 10th month of the Iranian calendar year, Iran had imported at least 81 metric tonnes of gold bullion, according to the country's customs administration.
This was reportedly more than 300 percent higher in terms of value compared with the corresponding period of the previous year, and 234 percent more in terms of weight.
In late February, new customs chief Foroud Asgari told reporters that gold imports earned for exporting goods have surpassed 100 tonnes, without elaborating further.
That would signal a more than three-fold increase compared with the 30-tonne total of the previous year.
Central bank chief Mohammad Reza Farzin claimed in December that 20 percent of the country's foreign currency reserves have been turned into gold, and Iran possesses one of the highest ratios of gold to foreign exchange in the world.
Mohammad Ali Dehghan Dehnavi, the head of Iran's Trade Promotion Organization, said last month that the country's trade balance is again negative this year, but 'most of that is due to the increase in gold imports'.
Iranian authorities have not disclosed where they imported the gold from, or what they exported to get it.
Some reports have indicated Iran got part of the gold from Russia in exchange for suicide drones. Iranian officials have not commented on the claim, maintaining that they only exported some drones to Russia months before the start of the Ukraine war.
Gold everywhere
The increasing focus on gold has not been limited to the Iranian government, which has also been scrambling to plug its budget holes by significantly raising taxes.
Iranians have long been hedging against their freefalling national currency by purchasing foreign currencies and various gold products, especially coins minted by the central bank.
Authorities have also been heavily encouraging gold purchases in recent months.
Dozens of services and applications have sprouted up, with large public advertising campaigns telling people they can turn their savings into gold for as little as the equivalent of $1 or less.
But not all of them have proven gold reserves, prompting authorities to periodically warn citizens to only buy from certified vendors to avoid being duped.
Superstition played in too, with thousands queueing in front of gold stores last August to buy based on the belief that purchasing gold on the 13th day of the Islamic month of Safar would bring good fortune.
Those people, and others who bought gold this year, are comfortably in the green as the value of gold – both driven by global demand and local upheavals – has risen much higher than Iran's 35 percent inflation.
The central bank has also been holding a string of new gold coin pre-sales, with delivery dates of up to six months. Some of those coins have been sold at higher prices than their intrinsic global value.
The central bank planned to issue new gold certificates before the end of the current Iranian calendar year on March 20 as well but postponed it to next year.
The monetary regulator has not announced conditions for issuing the state-backed certificates, only saying the plan was delayed 'considering the economic conditions of the end of the year and the stock market'.
TEDPIX, the main stock market index in the Tehran Stock Exchange, reached all-time highs in January but has been undergoing a highly volatile period as the US and Israel threaten to bomb Iran and the country's economic woes worsen.
What's behind the gold rush?
After Iran was cut off from the global payment network and found its access to foreign currencies heavily constrained, gold was increasingly favoured by authorities as a way to decrease dependence on the US dollar and to hold assets with intrinsic value to use as a medium for trade.
Iran is believed to have flown in most of its imported gold through Tehran's Imam Khomeini International Airport to limit potential logistical challenges linked with transporting large volumes.
The government is also trying to expand local gold production in the coming years, as it currently plays a relatively modest role due to lacklustre investments in exploration and mining operations.
But while the gold strategy may yield short-term gains for an economy under immense pressure, it has serious limitations in curbing runaway prices.
Economist and market analyst Mehdi Haghbaali told Al Jazeera that the central bank's gold coin sales to the public are unlikely to be very effective.
He explained that excessive money supply growth – a main reason behind perennial inflation in Iran – cannot fully explain the devaluation of the national currency in recent months, as it has been closely linked with geopolitical turmoil.
'By selling gold coins, the central bank supposedly tries to signal its confidence and its huge reserves of foreign assets – either in foreign exchange or in gold,' he said.
'But even if this is the case, the auctions will be futile. The central bank and the government's cards are known to the public, and the huge fiscal deficit and the forthcoming trade difficulties under the new US administration are all very well known to market players. As a result, no matter how much gold the central bank sells, it will fail to change public perceptions, thereby having almost zero impact on the prices.'
Haghbaali said only improved macroeconomic and political conditions could have a meaningful impact on prices, rendering the gold sales 'almost a waste of energy and resources'.
Missing gold?
The vast quantities of imported gold and the expected murkiness surrounding it amid the sanctions have led to more accusations of wrongdoing.
Yashar Soltani, an independent Iranian investigative journalist, made headlines last week after he claimed that more than 61 tonnes of gold were 'missing' and had not been offered on the market.
He also pointed out that gold coins are being sold at inflated prices, strengthening longstanding accusations by local politicians and economists against successive Iranian governments that they manipulate rates to boost short-term gains.
The central bank issued a short statement to reject the claims without elaborating, only saying that it would pursue a legal case against the journalist through the judiciary.
State media rushed to defend the authorities' gold strategy as well, with government-run IRNA arguing that it makes sense to sell parts of central bank gold reserves as it offers quick liquidity under sanctions.