Syrians consider gold as jewelry and a means to save money for years to come: Head of Goldsmiths' Association

Skyrocketing prices

Gold is one of the most important valuable metals on earth. This lustrous yellow precious metal has been considered as a wealth by all countries of the world as its price measures the strength of economies, that is, when gold prices are high in a country, this means that the economy of this country is not healthy.

In Syria, the price of 1 gram of 21 karat gold was 1805 Syrian pound (SYP) in 2010, a year before the crisis caused by the terrorist war on the country started. The prices witnessed gradual increase in later years to hit 17,500 Syrian pound per 1 gram of 21K gold in 2018. In 2019,  gold prices jumped to 28,000 Syrian pounds per gram of 21K gold, a 15-fold increase compared to the prices before the crisis.

However, a skyrocketing increase in gold prices in Syria has been registered this year, 2020, particularly under the coronavirus pandemic crisis and the deteriorating economic situation in the country caused by the western sanctions and the unfair coercive measures which have badly affected the exchange rate of the Syrian pound and consequently weakened the Syrians' purchase ability.

According to Ghassan Jazmati, Chairman of the Association of Goldsmiths and Jewelry Making in Damascus, gold prices in Syria have hit a record high (about 111,000 SYP per 1 gram of 21 karat gold early this month), as a result of manipulation in the exchange rate of the US dollar on the black markets that caused devaluation of the Syrian pound (2500 Syrian pound to 1 US dollar).

    

"The price of gold is basically associated with the price of the ounce in global markets and with the exchange rate domestically. Currently, an ounce in global markets is valued at $1744 because of the Coronavirus crisis, which caused havoc in all economies around the world," Jazmati told the "Syria Times" e-newspaper.

He said that in order to limit their loss, most of the companies, which have closed during the coronavirus crisis, have changed their money into gold , thereby creating a demand for this precious metal, a demand that raised the value of the ounce globally.

How the Syrians view gold

About the importance of gold in the life of the Syrians, Jazmati, the Syrian gold expert, said that "gold is essential in the life of all people. The Syrians consider it as a jewelry, and, more importantly, as a means to save money for years to come. This has been proven during the critical circumstances Syria has been experiencing over the past years and during the coronavirus crisis."

"Many Syrians resort to changing part of their properties- cars, houses or lands- into gold, mainly liras or ounces, in order to avoid a loss," he said, stressing that investment in gold is currently the most successful and the safest project. He noted that the value of an ounce is currently estimated at 4.5 million SYP.

With gold prices growing higher in Syria, one may ask: "Are the Syrians still buying gold?"

Surprisingly, the answer was yes! "Many Syrians are still interested in investing their money in gold, mainly by buying small, but valuable pieces like ounces or liras. There is a demand for buying gold in Syria particularly by traders, investors and rich people," said Jazmati.

However, most of the Syrian citizens don't have enough money to buy gold amid the current difficult circumstance, and they rather concentrate on buying their basic needs, he went on to say, indicating that before 2011, a citizen who wanted to get married, could buy his bride a complete collection of gold, but now he can hardly buy the rings, and even less, at the same value of that collection."

Stagnation

According to Jazmati, these developments, besides citizens' hesitation to buy or sell gold hoping that the SYP's exchange rate will restore its stability, have led to notable stagnation in the gold market, thus necessitating more efforts by the Goldsmiths' Association to ensure the availability of raw gold in the workshops. These efforts go in line with the legislative decree that allows any Syrian citizen to legally bring in raw gold to the country in exchange for paying 100 dollars per kilo of gold at borders, he said, noting the importance of this step in boosting the country's resources of hard currency.

The Coronavirus crisis in the world has caused further stagnation in the Syrian gold markets.  "Many Syrian expatriates, mainly in the Gulf and Europe, used to visit the country during summer- between June and September- for many purposes including to get married. They used to buy their wedding rings and other gold accessories to their brides, a tradition without which no wedding is complete. However, this will be difficult this year as airports are still closed because of anti-coronavirus measures," Jazmati said.

He made it clear that during the period of lockdown and curfew imposed in Syria between March 25th and May 25, all economic and trade activities as well as transportation stopped. The gold hallmarking process, a precondition for gold items offered for public sale, also stopped over a period of three months during which goldsmiths ran out of stamped gold, mainly ounces and liras, thus negatively impacted the market.

Gold hallmarking returns

 In order to restore the hallmark, Jazmati explained, "we reached an agreement with the Finance Ministry on July 1, according to which the goldsmiths' associations in Damascus and Aleppo agreed to pay 80 million Syrian pound per month to the Ministry as a consumption spending tax."

"Two years ago, the situation of the gold market was very good despite the war on the country and the sanctions. Hundreds of artisans used to come to the association everyday to stamp their gold products and we used to pay some 120 million SYP per month as taxes to the Finance Ministry,  but now, given the difficult economic situation in the country, we are going to pay 80 million," he said.

The return of the gold hallmark will contribute to reactivating the gold market and to making stamped gold available to customers, he made it clear, pointing out sales in the gold market have slightly improved at 20%, as markets have reopened and the gold hallmark has returned.

According to Jazmati, there has been a great demand for Syrian gold in Arab countries, mainly the gulf states, due to its distinguished characteristics, noting active talks to encourage Syrian traders to take part in future gold and jewelry exhibitions abroad. However, the local request for gold comes mostly from the coastal area, Lattakia and Tartous, the two key Syrian tourist destinations, he indicated.

He made it clear that Syrian gold is one of the most prestigious kinds of gold in the world. It competes with the Italian gold and it has many advantages that are not available in the gold of other countries.

The work of a goldsmith in Syria is distinguished by its high quality innovate designs, professionalism, accuracy and purity. Most of the Syrian gold jewelries are hand-made, not machine-made which indicates the craftsmanship of Syrian jewelers, who have sought preserving the identity of a handicraft that goes back to thousands of years.

On gold smuggling, Jazmati said that there are no smuggling incidents currently as borders are closed. Before the coronavirus crisis, there were many cases of smuggling raw gold and selling it in neighboring countries because its value is higher there, he added.

He explained that gold is usually being brought in to Syria via the Lebanese capital, Beirut, noting that the pricing of gold is specified in conformity with its value in the neighboring countries in order to avoid smuggling.

To know more about the situation of the gold market, the Syria Times visited Souk al-Sagha or "the jewelry market", located in al-Hariqa neighborhood of old Damascus. Most of the shops were open, displaying their goods. But sadly, very few people visited the market, most of them came either to repair damaged gold or to have an idea about gold prices.

A wholesaler working in the market told Syria Times that "gold is very expensive. we used to sell 100-200 pieces a day before the coronavirus crisis, but today I haven't sold a single piece. High gold prices are a problem to both customers and goldsmiths and we hope that prices will decline so that people can buy and the market restores its activity."

    

Another wholesaler complained about the lack of gold coming to the market, calling on the government to help ensure raw gold to goldsmith workshops so they can manufacture gold products and fill their shops with wonderful pieces.  He said that citizens are not selling gold nowadays. they prefer to keep their own and buy new pieces to preserve their money in the light of unstable exchange rate of the Syrian pound.

Just about 100 meters away from Souk al-Sagha, Manal, a retired teacher, told Syriatimes "I like gold and I like buying it to wear as jewelry or to keep for hard times."

"Besides my wedding gold, I used to save money from my salary and buy gold, especially liras because, unlike money, they don't lose their value," she said, pointing out that the difficult economic situation in the country and the increase in the prices of goods left no place for gold in people's life, particularly in the light of high gold prices.

Report and photos by: Hamda Mustafa